What are VISA cards and credit cards? What are the differences between credit cards and debit cards? What are the rules for using credit cards in Vietnam?
What are VISA cards and credit cards in Vietnam?
To answer what a VISA card and a credit card are, readers can refer to the content below:
Pursuant to the provisions of Article 3 of Circular 19/2016/TT-NHNN, bank cards include 03 types:
- Debit card means a card that authorizes its holder to conduct card transactions within the amount of money available and overdraft limit (if any) on the payment deposit account of the cardholder opened at a card issuer.
- Credit card means a card that authorizes its holder to conduct card transactions within the credit limit granted under the agreement with the card issuer.
- Prepaid card means a card that authorize its holder to conduct card transactions within the value limit deposited to the card corresponding to the amount of money already prepaid by its holder to the card issuer.
Accordingly, VISA cards include 03 types: Visa Debit cards, Visa Credit cards, Visa Prepaid cards; Mastercard include 03 types: Mastercard Debit, Mastercard Credit, Mastercard Prepaid.
- VISA cards are international payment cards made by the Visa International Service Association. It cooperates with different banks to provide cards and can make transactions around the world. To date, VISA cards are available in more than 190 countries and Vietnam is also among them.
- A credit card is a card that authorizes its holder to conduct card transactions within the credit limit granted under the agreement with the card issuer.
Above is a reference to the question of what VISA cards and credit cards are that many people still wonder about.
What are VISA cards and credit cards? What are the differences between credit cards and debit cards? What are the rules for using credit cards in Vietnam? (Picture from internet)
What are the differences between credit cards and debit cards in Vietnam?
Here are some differences between credit cards and debit cards:
Differences | Credit cards | Debit cards |
Interpretation of terms | Debit card means a card that authorizes its holder to conduct card transactions within the amount of money available and overdraft limit (if any) on the payment deposit account of the cardholder opened at a card issuer. (Clause 2 of Article 3 of Circular 19/2016/TT-NHNN) | Credit card means a card that authorizes its holder to conduct card transactions within the credit limit granted under the agreement with the card issuer. (Clause 3 of Article 3 of Circular 19/2016/TT-NHNN) |
Card structures | Front: - Symbol (usually VISA or Mastercard) - The words “DEBIT” above or below the payment unit symbol - Name and logo of the card-issuing bank - Card number, cardholder name - Card validity period Backside: - Magnetic strip contains encrypted information and safety check elements | Front: - Symbol: the word “CREDIT” on the card - Name and logo of the card-issuing bank - Card number, cardholder name - Card validity period - Electronic chips Backside: - The magnetic strip contains the CVC/CVI number - Signature box for cardholders |
Level of expenditure | - Less than or equal to the amount in the account. - Cannot pay if there is not enough money in the card for the transaction | -Based on the limit provided by the bank to the cardholder - Customers can pay without having money on the card. Some banks allow overspending but customers have to pay an additional fee |
Conditions for opening a card | Present ID card or citizen ID card. | The person opening the card must have a stable job, documents proving income, average monthly income statement, labor contract, ownership documents (depending on each bank and card type, the Bank will require appropriate documents) |
Fees, interest rates | Most debit card fees (withdrawal, transfer, annual fees) are lower than credit cards. Depending on the bank, Internet Banking fees will be charged or not. However, international debit cards will have higher fees than domestic debit cards. | Credit card fees (withdrawal fees, annual fees) are often very high. For credit cards, Internet Banking fees are usually free. Customers must pay interest rates as high as loan interest rates if they pay late. |
Advantages and disadvantages, points of credit and debit cards:
(1) Credit cards:
Advantage:
- Make shopping transactions easily. At the same time, compared to other types of cards, credit cards often have credit card installment and refund incentive programs.
- Borrow with lower interest rates: For credit cards, customers must satisfy the bank's requirements to be allowed to open a card. Therefore, banks can evaluate and consider the level of risk when lending through credit cards. The interest rate when borrowing therefore also enjoys more incentives than when borrowing normally.
Defect:
- The annual fee of a credit card is quite high
- Difficult to control spending: Just swipe the card to complete the purchase.
- High cash withdrawal fee.
(2) Debit card:
Advantage:
- Safer and more secure than storing cash
- Compact, easy to store: Instead of holding a lot of money on you, with just one bank card, users can pay bills from a few million to several tens of millions.
- Receive interest from the money in the card: In addition to using it for payment, many banks now also pay interest to users according to the interest rate on demand deposits.
Defect:
- Must deposit money in advance to use: Debit cards do not have the spend first, pay later feature like credit cards, so if there is no money in the account, the debit card cannot be used to pay.
- Cannot spend more than the amount on the card.
What are the rules for using credit cards in Vietnam?
Current principles for using credit cards are stipulated in Article 17 of Circular 19/2016/TT-NHNN as follows:
- Each cardholder must provide sufficient and accurate information as required by the card issuer in the agreement on card issuance and usage and take responsibility for the accuracy of the information provided.
- When using a credit card or a debit card with overact facility, the cardholder must use money properly and make full and due repayment of loan amounts and interests thereof to the card issuer as specified in the agreement concluded with the card issuer.
- Scope of card usage:
+ Debit cards and personalized prepaid cards are used to conduct card transactions as agreed upon by the cardholder and the card issuer; Credit cards are used to pay for the purchase of goods and services; deposit and withdrawal of cash as agreed upon between the cardholder and the card issuer.
+ Do not withdraw foreign currency in cash abroad or make international payments, except for the cases specified in Clause 4, Article 10a of Circular 19/2016/TT-NHNN.
*Note:
- Article 17 of Circular 19/2016/TT-NHNN is supplemented by Clause 11, Article 1 of Circular 17/2021/TT-NHNN.
- Clause 1, Article 17, Circular 19/2016/TT-NHNN is amended by Clause 9, Article 1, Circular 17/2021/TT-NHNN.
- Clause 2, Article 17, Circular 19/2016/TT-NHNN is amended by Clause 9, Article 1, Circular 17/2021/TT-NHNN.
- Clause 3, Article 17, Circular 19/2016/TT-NHNN is supplemented by Clause 8, Article 1, Circular 26/2017/TT-NHNN.
- Point b Clause 3 Article 17 Circular 19/2016/TT-NHNN is amended by Clause 6 Article 1 Circular 28/2019/TT-NHNN.
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