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 species are different. The only thing that unites them is that each of the cards has annual service, which, depending on the conditions, can be different amounts. Basic information about each plastic card 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 permissible amount. A card with debit functionality is very simple to issue. To do this, you need to provide only your general passport and replenish your bank account. Debit cards are widespread, as many employers issue them for their employees and transfer all payments in a non-cash way.
A credit card is issued at a branch of one of the banks upon confirmation by the borrower of their financial capabilities in order to repay the funds used by the credit institution. The conditions for using credit funds differ in interest rates, availability and duration of the grace period and other factors in accordance with the conditions and tariffs of the selected bank.
What are overdraft cards?
An overdraft card is called so by combining the two previous types of plastic cards. The main feature is that it is available for registration only if there are transfers of your salary to it. First, expenses are written off precisely at the expense of own funds on the card, and only in cases where the amount in the account is insufficient for payment, an overdraft is used. What are overdraft cards? In essence, overdraft is a short-term loan. A short-term overdraft is called because repayment occurs the next month when payroll.
Overdraft history
Initially, Russian banks provided overdraft services only to legal entities. Companies in the event of a situation when their account was empty, could use the funds of the bank to pay for their obligations to other legal entities. At the time of receipt of funds in the company's current account, the bank wrote off part of them to repay the resulting debt, and the remaining funds remained in the account.
In the future, the service was developed in the field of private individuals and became known as “overdraft for individuals”. The scheme for the provision and use of borrowed funds is identical to the scheme for servicing companies. Simplified overdraft banking can be described as follows.
Lack of finance when paying → Use of an overdraft and payment for goods / services → Redemption 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 widespread and reliable bank in Russia, so many people are wondering what the overdraft card of Sberbank of Russia is. Let's start in order.
What is the Overdraft card of Sberbank of Russia? This is the salary card of an individual with the overdraft functionality activated (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 salaries through third-party banks).
- Application for the provision of this service.
- Your passport.
- A copy of the work book certified by the employer.
- A statement of income or an extract from a personal account with another bank.
If your company is already serviced at Sberbank, and the card is in your hands, then connecting to the service will be much easier. Contact the bank branch with a passport and a card, and any employee of Sberbank will be able to connect such functionality.
Overdraft Card Terms
Like any banking service, an overdraft card is provided on certain conditions. In case of using borrowed funds, the bank accrues interest on the amount of overdraft. In Sberbank, the interest rate is 18% per year. The bid is small at first glance. However, there is important information that the client must always consider.
- Exceeding the limit is fraught with an increase in interest rates up to 36% per year.
- The terms for repaying funds are limited in time and amount to 1 month. It is assumed initially for this type of card that the receipt of funds in your name occurs at least 1 time per month.
- Overdraft does not provide for a grace period (when interest for use is not charged).
Overdraft card of Sberbank. How to find out the limit?
What are overdraft cards of Sberbank of Russia, you know. How to find out 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 profit for the last months (half a year). The overdraft amount will be 40% of this value.
You can also find out the limit on the card 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 overdraft on a salary card, then the first option will be more profitable for the borrower. Interest rates and loan amount are more profitable, especially if you plan to purchase expensive equipment or goods whose value exceeds the overdraft limit.
Credit cards can also be considered more advantageous than overdrafts, especially if the repayment occurs during the grace period. Since the bank in this case does not accrue interest.
Overdraft Terms
A person applying to the bank with an application 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, an individual must be in an employment relationship with the employer.
- You should not have a loan debt at the moment. A willing bank will provide an overdraft to customers with a positive credit history. This requirement remains at the discretion of the bank in accordance with internal documents on servicing individuals.
- The bank may make registration requirements. For example, it will provide an overdraft to a client who has applied to a bank branch in his region of residence.
- Other requirements regarding the income of an individual and organizations.
Disadvantages of overdraft cards
If a significant part of the overdraft limit has been used, the salary received in your account may not be enough to fully pay it off. And the terms for paying overdraft debt are very tight, 1 month. Therefore, you will either have to save a lot the whole next month, or report money yourself from other sources. This is extremely inconvenient. Indeed, if this is not done, then the overdraft will not be closed, and the accrued interest will already be 36% of the remaining debt. That is, you will significantly overpay in the end.
You must 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 late fees are charged from the client, and not from the accounts of the organization that did not transfer your salary on time.
Advantages of overdraft cards
What are overdraft cards and what are their advantages, read on. The main advantage of it can be called the requirements for its receipt. Especially if you are already a member of the Sberbank salary project. An overdraft card is usually issued for VISA and MasterCard payment systems not lower than the standard level (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, overpayment for the provision of a short-term loan does not arise, and the overdraft closes (is canceled). Further use continues with standard parameters: 18% per annum and 1 month for payment.
Tips for overdraft card holders
You can find out about the availability of services on your card in several ways:
- when contacting the accounting organization of the employer;
- in your account on the website of the servicing bank.
To avoid additional costs associated with paying accrued interest, fines or penalties, 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 on the day after accruals, since not always cash - accrued wages - arrive on the account quickly. Technical problems may arise, and the charge-off will occur due to overdraft, since its amount is always at your disposal.