What is a credit card? What is the current annual fee for credit card in Vietnam?

Hello, Lawnet would like to answer as follows:

1. What is a credit card?

According to the provisions of Clause 4, 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. This means that the credit card will be linked to the bank and the customer will be able to borrow an amount of money within the allowed limit to shop, spend and pay instead of cash and at the end of the term will have to fully return it to the bank. The number of limits granted depends on the customer's credit history and income level.

How many types of credit cards are there?

There are 2 types of credit cards including:

- Domestic credit card: A type of card that can only be used for domestic payments.

- International credit card: A type of credit card that can make domestic and international payments directly without needing to exchange cash.

Thus, credit cards will help customers conveniently and easily pay for shopping expenses at supermarkets, through websites that integrate online payment methods, pay bills or book airline tickets...

2. What is the current annual fee for credit card in Vietnam?

Annual fee is a card-related fee that is collected annually to maintain the card account and receive benefits from the card. When you open a card, this fee will begin to be charged.

According to Article 91 of the Law on Credit Institutions 2010, interests and charges in business activities of credit institutions are regulated as follows:

- Credit institutions may fix and shall publicize deposit interest rates and service charge rales applied in their business activities.

- Credit institutions and their clients may agree on interest rates and credit extension charges to be applied to their banking operations according to law.

Note: In case banking operations experience abnormal developments, in order to assure safety for the credit institutions system, the State Bank may provide a mechanism for determining charge and interest rates applicable to business activities of credit institutions.

According to the instructions in Clause 1, Article 5 of Circular 19/2016/TT-NHNN, credit card service fees as follows:

- Only card issuers are permitted to collect fees and charges from cardholders. Each card issuer must collect fees and charges according to its own schedule of card service fees and charges and must not collect any additional type of fees/charges not mentioned in the announced schedule of card service fees and charges.

- The schedule of card service charges must specify types of fees and charges applicable to every card and card services.

- The schedule of card service fees and charges of card issuers must comply with regulations of law, be posted publicly and provided for cardholders before its application and upon any change to this schedule.

- Types of notification and supply of information of those charges to cardholders must be specified in the agreement on card issuance and usage.

- A period of at least 7 days is required for the application of any change of the service charges from the date on which it is informed and such period must be specified in the agreement on card issuance and usage.

At the same time, according to the provisions of Point dd, Clause 1, Article 13 of Circular 19/2016/TT-NHNN, an agreement on card issuance and usage must contain regulations on fees and charges (types and changes of fees and charges)

However, the cardholder has the right to complain and the card issuer is responsible for resolving and responding to the cardholder's complaint. (According to Article 20 of Circular 19/2016/TT-NHNN)

Thus, according to the above regulations, the credit card annual fee will be decided by the credit institution and publicly posted, and the credit institution and customer have the right to agree on the interest rate and related service provision fees. Customers have the right to complain if the fee is unreasonable, and the credit institution is responsible for resolving it.

Current credit card annual fees at banks in Vietnam

(This fee is for reference only)

- The current annual credit card fee at banks ranges from 100,000 VND to 500,000 VND/year, depending on the card type, issuing bank, and card class.

- First year credit card annual fee: In general, banks waive the first-year annual card fee for customers. However, some banks may have preferential programs, waiving the first year's annual fee for some specific customers, such as:

+ Customers whose spending revenue reaches a certain level in the first year

+ Customers have credit cards sponsored by businesses

+ Customers with credit cards issued for special occasions

- Credit card annual fee for the 2nd year onwards: The credit card annual fee for the 2nd year onwards will be calculated according to the customer's card class.

Note: The higher the card level, the higher the annual fee

- Annual fee by card class:

+ Sacombank: Standard Sacombank Visa/MasterCard credit card annual fee is 299,000 VND/year.

+ Vietcombank: Standard Vietcombank Visa/MasterCard credit card annual fee is 200,000 VND/year.

+ Vietinbank: Standard Vietinbank Visa/MasterCard credit card annual fee is 120,000 VND/year.

+ VPBank: Standard VPBank Visa/MasterCard credit card annual fee is 250,000 VND/year.

Best regards!

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