Bank overdraft card – what is it? Conditions of receiptOn June 24, 2019 by admin
Sometimes there are unpleasant situations when, when making a payment, it suddenly turns out that there are not enough funds in the account. Bank’s overdraft card will relieve its holders of problems by providing the remaining amount without any delays and design requirements.
By granting extended powers to payers, the overdraft is subject to special conditions. Therefore, it is necessary to know what an overdraft card is and how to use it with your own benefit.
Card overdraft concept
Most recently, the largest bank in the Russian Federation has informed mobile application users about the change of debit plastic status to an overdraft card of Bank. What it is and what advantages it gives – these questions interest many cardholders, since this type of service was not common among the population. At the same time, the transfer of cards to overdraft and change of status were associated with technical necessity and did not provide for the actual connection of the option.
According to the policy of the bank, the change of card status to overdraft occurs solely by the will of the holder who issued the plastic, and needs additional coordination. This means that automatically get the option does not work.
Overdraft card provides the possibility of exceeding the amount of expenditure transactions over the amount of the balance on the card account. Now the owner of plastic with a connected overdraft can successfully complete the payment, even if the funds in the account are insufficient. As a result, Bank of Russia provides the amount missing for payment, charging for it a certain fee.
What an overdraft card means for a simple inhabitant can be seen from the following example: an employee of an organization who receives a salary on a Visa Classic debit card decided to spend the rest on the eve of a new receipt, but the purchase amount was not enough, as a result of the next transfer the amounts were automatically written off, which was not enough last time to complete the payment.
An overdraft card that is issued by an employer for payroll transfers often already has a connected option, so you should be careful when managing the latest funds in your account – it is possible that the bank funds will be used when making the payment, in fact, used by micro-lending.
The branch specialists, issuing an Bank overdraft card, explain that this is a convenient way to recharge a small amount for a short period, which will be automatically returned to the bank upon the next receipt.
Terms of connection
Despite the special convenience of use, it should be understood that money is lent by the bank under certain conditions:
1. Depending on the activity of use, its overdraft limit is set. As a rule, the size of the limit does not exceed 30 thousand rubles, but the exact limit is set individually.
2. Funds are allocated by the bank on a reimbursable basis:
- for ruble accounts on “Classic Visa”, “World” is charged at 18% per annum, for foreign exchange transactions on the same types of payment systems – the rate of 16%;
- for Maestro social cards with an unspecified limit, they charge 40% per annum;
- for the payment system “MasterCard Mass” a unique zero rate has been established for the use of borrowed funds.
3. If the overdraft is not repaid in time, a higher rate will be charged (from 34-36% in rubles), so you should be careful not to use borrowed funds for a long period.
4. The repayment period is within one calendar month following the month during which a shortage of funds has occurred. Thus, the client has a nearly two-month period when it is possible to repay borrowed funds with a minimum overpayment.
Overdraft cards should be distinguished from a regular loan, since the loan amount is not agreed in advance, and for the use of a loan, no additional issue of a separate card or a visit to the bank is required.
At present, Bank offers overdraft on the most different types of payment systems “Mir”, “Visa Classic”, “Mastercard”, etc.
Bank’s offer covers not only customers among individuals, but also organizations. There are overdraft for the organization, on the debit cards of Bank and technical. If the service for legal entities and debit plastics is subject to individual coordination, then the employer himself often connects the overdraft on the payroll cards, concluding an agreement with the bank.
In some situations, a situation such as technical overdraft arises. Sometimes by debit card, due to technical failure, a much larger amount becomes available than it was originally intended or was available on the card account. Causes of technical overdraft can be currency fluctuations, various technical problems, delays in transferring funds on the card.
Thanks to the use of overdraft, the user solves the problem when quite a bit of funds are missing before the receipt of salary.
Short-term loan in the form of overdraft has its pros and cons:
- No need to spend time searching for funds and borrowing them from friends;
- additional coordination with the bank and the release of a separate plastic are not required;
- the procedure of spending funds becomes more comfortable when a shortage of funds in a few pennies can be found out during payment.
At the same time, vigilance should be exercised and control over the expenditure of sums in order not to encounter a considerable over-expenditure, which would later have to be paid in the form of interest.
Connection of the option is made in the department where the card was issued, and only at the request of the client, subject to the presentation of a passport and bank plastic.
Do not think that the service will work automatically. A specialist bank will analyze the activity of spending funds and their receipts, the level of solvency and determine the available limit that can be set. Overdraft is usually offered at a rate not exceeding 2-3 monthly receipts on the card (or 2-3 salaries). For a larger overdraft additionally provide a certificate confirming the labor income of the citizen.
When connecting to the service, there are some exceptions: a legal entity can online send a request for connection of an option with an indication of specific persons who need an overdraft.
For security reasons, it is not recommended to set large limits, since in fact funds are issued with a rather large percentage overpayment. If funds are required for a long term, it is best to use a conventional loan, but to borrow small amounts, overdraft is the best solution.
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