What are internal regulations of the bank on granting credit through credit cards in Vietnam? Under what circumstances does credit card interest arise according to the law in Vietnam?
What is the credit card interest rate in Vietnam?
According to Clause 3, Article 3 of Circular 19/2016/TT-NHNN:
Terminology Explanation
In this Circular, the following terms are understood as follows:
1. Bank card is a payment instrument issued by the card-issuing organization to perform card transactions under the conditions and terms agreed upon by the parties.
The card in this Circular does not include types of cards issued by organizations providing goods and services solely for use in the payment of goods and services of the respective issuing organizations.
2. Debit card is a card that allows the cardholder to perform card transactions within the limit of the account balance and overdraft limit (if any) on the cardholder's payment account opened at the card-issuing organization.
3. Credit card is a card that allows the cardholder to perform card transactions within the credit limit that has been granted under an agreement with the card-issuing organization.
...
A credit card (credit card) is a card that allows the cardholder to perform card transactions within the credit limit that has been granted under an agreement with the card-issuing organization.
The credit card interest rate can be understood as a fee that customers must pay when making cash withdrawals or failing to meet debt payment obligations as prescribed when using a credit card.
Typically, each bank will stipulate an interest-free period for customers to arrange and balance their finances. If the cardholder pays off the balance within this period, they will not incur late fees and interest.
What are internal regulations of the bank on granting credit through credit cards in Vietnam? Under what circumstances does credit card interest arise according to the law in Vietnam? (Image from the Internet)
What are internal regulations of the bank on granting credit through credit cards in Vietnam?
According to point b, clause 1, Article 15 of Circular 19/2016/TT-NHNN (amended by clause 7, Article 1 of Circular 17/2021/TT-NHNN) on credit card issuance:
Credit Card Issuance
...
b. The card-issuing organization must have internal regulations on credit card issuance in compliance with legal regulations on safety assurance in credit issuance activities, including specific provisions on the target subjects, credit limits, credit conditions, credit issuance terms, debt repayment terms, restructuring of debt repayment terms, minimum repayment amounts, applicable interest rates, interest calculation methods, debt principal and interest recovery order, overdue debt penalty fees, loan purposes, credit approval processes, and responsibilities between the evaluation and credit approval stages. Additionally, measures to recover debts to ensure departmental responsibility within the card-issuing organization in the debt recovery process should be included;
...
Banks must have internal regulations on credit card issuance, in compliance with legal regulations on safety assurance in credit issuance activities, including specific provisions on:
- Target subjects of credit issuance;
- Credit limits;
- Credit conditions;
- Credit issuance terms;
- Debt repayment terms;
- Restructuring of debt repayment terms;
- Minimum repayment amounts;
- Applicable interest rates;
- Interest calculation methods;
- Debt principal and interest recovery order;
- Overdue debt penalty fees;
- Loan purposes, credit evaluation, and approval processes according to the principle of clearly defining responsibilities between the evaluation and credit approval stages;
- Measures to recover debts to ensure departmental responsibility within the bank during the debt recovery process.
Under what circumstances does credit card interest arise according to the law in Vietnam?
According to point g, clause 1, Article 13 of Circular 19/2016/TT-NHNN (amended by clause 6, Article 1 of Circular 17/2021/TT-NHNN) on credit card issuance and usage contracts:
Credit Card Issuance and Usage Contracts
1. The credit card issuance and usage contract must include at least the following contents:
...
g. Agreements on granting credit to the cardholder, which includes: Credit limits and changes to card usage limits, including overdraft limits (for debit cards) and credit limits; interest rates, loan interest calculation methods, debt principal and interest recovery order (for credit cards and overdraft debit cards); credit issuance terms, loan purposes, repayment terms, minimum repayment amounts, repayment methods, overdue debt penalty fees (if any). The agreement on credit granting to the cardholder may be specified in the credit card issuance and usage contract or in a separate agreed document;
...
The interest rate, loan interest calculation methods,... for credit cards is an agreement between the bank and the customer (credit cardholder).
Each bank will have different regulations on credit card interest rates for their customers.
Credit card interest rates may arise in the following cases:
(1) Cash Withdrawal
- Interest will be calculated from the moment the cash is withdrawn at an ATM or transaction counter.
- The interest rate is usually much higher than the interest rate for goods and services payments.
(2) Late Payment:
- Failure to pay the minimum amount on time: If the customer does not pay the minimum spending amount on time, they will incur a late payment fee.
- Failure to fully repay the debt during the interest-free period: The customer may be charged interest based on the total amount used, often higher than the on-time payment interest rate.
LawNet