2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
The variety of plastic cards of various banking organizations is huge. Among them there are debit, credit, overdraft cards. The advantages and disadvantages of each type are different. The only thing that unites them in many ways is that each of the cards has an annual service, which, depending on the conditions, can amount to different amounts. Basic information about each plastic card is below.
Types of plastic cards
A debit card is a card of one of the banks linked to your account in it. The use of funds from the account is carried out within the allowable amount. It is very easy to issue a card with debit functionality. To do this, you only need to provide your general passport and replenish your bank account. Debit cards are widespread, as many employers issue them for their employees and transfer all payments by bank transfer.
A credit card is issued at a branch of one of the banks when the borrower confirms his financial capabilities in order to repay the funds used by the credit institution. Terms of usecredit funds differ in interest rates, the presence and duration of the grace period and other factors in accordance with the conditions and tariffs of the selected bank.
What are overdraft cards?
The overdraft card is called so due to the combination of the two previous types of plastic cards. The main feature is that it is available for registration only if there are transfers of your wages to it. First, expenses are written off precisely at the expense of own funds on the card, and only in cases where the amount on the account is insufficient to pay, an overdraft is used. What are overdraft cards? In fact, an overdraft is a short-term loan. Short-term overdraft is called because the repayment occurs the next month at payroll.
Overdraft history
Initially, Russian banks provided overdraft services only to legal entities. Companies, in the event of a situation where their account was empty, could use the bank's funds to pay their obligations to other legal entities. At the time of receipt of funds to the company's current account, the bank deducted part of them to pay off the resulting debt, and the rest of the funds remained in the account.
In the future, the service was developed in the field of servicing individuals and became known as “overdraft for individuals”. The scheme for providing and using borrowed funds is identical to the scheme for servicing companies. Simplifiedbank overdraft can be described as follows.
Lack of funds when paying → Using an overdraft and paying for goods/services → Repayment from the transferred funds to the current account by the employer
Sberbank card with overdraft functionality
What are overdraft cards, you read above. Sberbank is the most common and reliable bank in Russia, so many people are wondering what an overdraft card of Sberbank of Russia is. Let's start in order.
What is an Overdraft card of Sberbank of Russia? This is a salary card of an individual with the connected overdraft functionality (short-term borrowing of bank money).
Sberbank overdraft card is issued upon contacting a bank branch and providing a package of documents (if you are currently receiving your salary through third-party banks).
- Application for the provision of this service.
- Your passport.
- Employer-certified copy of work book.
- Certificate of income or statement from a personal account in another bank.
If your company is already serviced by Sberbank, and you have the card in your hands, then connecting the service will be much easier. Contact a bank branch with a passport and a card, and any employee of Sberbank will be able to connect this functionality.
Terms of overdraft cards
Like any banking service, an overdraft card is provided under certain conditions. In the case of using borrowed funds, the bank charges interest on the overdraft amount. In Sberbankthe interest rate is 18% per year. The stakes are small at first glance. However, there is important information that the client must be aware of.
- Exceeding the limit is fraught with an increase in the interest rate up to 36% per year.
- Terms for the redemption of funds are limited in time and amount to 1 month. Initially, for this type of cards, it is assumed that the receipt of funds in your name occurs at least once a month.
- Overdraft does not provide for a grace period (when interest is not charged for use).
Sberbank overdraft card. How to know the limit?
What are overdraft cards of Sberbank of Russia, you know. How do you know the limit? The Bank calculates the overdraft limit individually for each client. The overdraft amount, according to the rules of the bank, for individuals is not more than 50% of the monthly income. For legal entities, it is calculated on the basis of the average value of the profit received for the last months (six months). The overdraft amount will be 40% of this value.
Also, the limit on the card can be found through the Sberbank-online service. In your personal account, you will see information about the amount of overdraft, debt and will be able to evaluate your expenses thanks to a bank statement.
Overdraft and loans
If we compare the conditions for obtaining a consumer loan and an overdraft on a salary card, then the first option will be more profitable for the borrower. Interest rates and loan amountmore profitable, especially if you plan to purchase expensive equipment or goods whose value exceeds the overdraft limit.
Credit cards can also be seen as more profitable than overdrafts, especially if the repayment occurs during the grace period. Since the bank does not charge interest in this case.
Overdraft conditions
A person applying to a bank for an overdraft must meet certain requirements of a credit institution.
- Continuous work experience must be at least 6 months at the last place of work, and at the time of application, the individual must be in an employment relationship with the employer.
- You should not be in debt on loans at the moment. The bank is more willing to provide an overdraft to customers with a positive credit history. This requirement is at the discretion of the bank in accordance with internal documents for servicing individuals.
- The Bank may impose requirements related to registration. For example, it will provide an overdraft to a client who applied to a bank branch in their region of residence.
- Other income requirements for individuals and organizations.
Disadvantages of overdraft cards
If a significant part of the overdraft limit has been used up, the wages received in your account may not be enough to fully pay it off. And the deadlines for paying debts on an overdraft card are very strict, 1 month. Therefore, either stronglysave the whole next month, or report the money yourself from other sources. This is extremely inconvenient. After all, if this is not done, then the overdraft will not close, and the accrued interest will already be 36% on the balance of the debt. That is, you will significantly overpay in the end.
You need to pay for using the overdraft service, as well as for servicing your account. The overdraft amount is debited from the card automatically once a year. Fines and pen alties for late payment are charged to the client, and not from the accounts of the organization that did not transfer your salary on time.
Dignity of overdraft cards
What are overdraft cards and what are their advantages, read on. Its main advantage can be called the requirements for its receipt. Especially if you are already a member of the Sberbank salary project. A card with an overdraft limit is usually issued for VISA and MasterCard payment systems not lower than the standard level (the so-called social cards do not provide for the presence and connection of an overdraft).
Timely payment of overdraft debt and transfer of funds on time to your current account is a guarantee of your peace of mind. In this case, there will be no overpayment for providing a short-term loan, and the overdraft will be closed (reset to zero). Further use continues with standard parameters: 18% per annum and 1 month for payment.
Advice for overdraft cardholders
You can find out about the availability of services on your card in several ways:
- when contactingaccounting department of the employing organization;
- in your account on the website of the servicing bank.
To avoid additional costs associated with the payment of accrued interest, fines or pen alties, you must constantly monitor your debit account. Some terminals (ATMs) may show the total amount of available funds, including overdraft and accrued salary.
It is better to carry out operations to withdraw funds or pay for goods/services the next day after accruals, since funds - accrued wages - are not always credited to the account quickly. Technical problems may occur, and the overdraft will be charged, as its amount is always at your disposal.
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