What are overdraft cards? Overdraft, card

The variety of plastic cards of various banking organizations is enormous. Among them there are debit, credit, overdraft-card. The advantages and disadvantages of each species are different. Unites them in many ways only that each of the cards has annual maintenance, which, depending on the conditions, may amount to different amounts. Basic information about each plastic card is 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 limits of the allowable amount. A card with a debit function is very simple to arrange. To do this, you need to provide only your general passport and replenish your bank account. Debit cards are widely distributed, as many employers make out their for their employees and transfer all payments in a non-cash way.

A credit card is issued at the branch of one of the banks upon confirmation by the borrower of its financial capabilities in order to repay the used funds of the credit institution. Terms of use of credit facilities differ in interest rates, the 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?

The overdraft card is called this because of the combination of the two previous types of plastic cards. The main feature is that it is available for registration only if there are transfers to it of your salary. First, charges are written off at their own expense on the card, and only when the amount on the account is insufficient for payment, an overdraft is used. What are overdraft cards? In fact, an overdraft is a short-term loan. Short-term overdraft is called because repayment occurs next month when you pay wages.

Overdraft History

Initially, Russian banks provided overdraft services only to legal entities. Companies in the event of a situation when their r / s was empty, could use the bank's funds to pay their liabilities to other legal entities. At the time of receipt of funds on the bank account of the company, the bank wrote off part of them in order to pay off the debt, and the remaining funds remained in the account.

In the future, the service was developed in the field of private customer service 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. Simpler bank overdraft can be described as follows.

Lack of finance when paying → Use of overdraft and payment for goods / services → Payment of the transferred funds to the settlement account by the employer

Sberbank card with overdraft functionality

What are overdraft cards, you have read above. Sberbank is the most common 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 a salary card of an individual with an attached overdraft functional (short-term borrowing of bank money).

The overdraft card of the Savings Bank is issued when you apply to the bank branch and provide a package of documents (if you currently receive salaries through third-party banks).

1. Application for the provision of this service.
2. Your passport.
3. A copy of the workbook certified by the employer.
4. A certificate of income or an extract from a personal account in another bank.

If your company is already serviced by Sberbank, and the card is in your hands, then the connection of the service will be much easier. Go to the bank branch with a passport and a card, and any employee of the Savings Bank will be able to connect such functionality.

Card conditions with overdraft

Like any banking service, a card with overdraft functionality is provided under certain conditions. In the case of using borrowed funds, the bank accrues interest on the amount of the overdraft. In Sberbank, the interest rate is 18% per year. The rate is small, at first glance. However, there is important information that the client must always take into account.

1. Exceeding the limit is fraught with an increase in the interest rate to 36% per year.
2. The terms for the cancellation of funds are limited in time and amount to 1 month. It is assumed initially for this type of cards that the receipt of funds for your name occurs at least 1 time per month.
3. Overdraft does not provide for a grace period (when interest for use does not accrue).

Overdraft card of the Savings Bank. How to know the limit?

What is the overdraft card of Sberbank of Russia, you know. And how to know the limit? The bank calculates an overdraft limit individually for each customer. The amount of overdraft, 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 the profit received in the last months (six months). The amount of the overdraft will be 40% of this value.

Also, the limit on the card can be found through the Sberbank-online service. In your personal account you will see information on the amount of overdraft, debt and you will be able to assess your expenses by extracting from your bank account.

Overdraft and loans

If we compare the conditions for obtaining consumer credit and overdraft on a salary card, then the first option is more profitable for the borrower. The interest rates and the 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 viewed as more profitable than overdraft, especially if the cancellation occurs during the grace period. Since the interest of the bank in this case does not accrue.

Overdraft terms and conditions

A person who applied to the bank for an overdraft application must meet certain requirements of the credit institution.

1. Continuous work experience must be at least 6 months at the last place of work, and at the time of treatment an individual must be in labor relations with the employer.
2. You should not have debt on loans at this time. A more 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 for servicing individuals.
3. The bank may file claims related to the registration. For example, it will provide an overdraft to the client, who applied to the bank branch in the region of his residence.
4. Other requirements concerning income of an individual and organizations.

Disadvantages of overdraft cards

In the event that a significant part of the overdraft limit was used, the wages received to your account may not be enough to completely extinguish it. And the terms of payment of debts under the overdraft card are very strict, 1 month. Therefore, you will either have to save a lot the whole next month, or you will be able to report money yourself from other sources. This is extremely inconvenient. After all, if not done, then the overdraft will not be closed, and the accrued interest will already be 36% for the balance of the debt. That is, you will overpay in the end.

You must pay for using the overdraft service, as well as for maintaining your account. The amount for an overdraft is debited automatically from the card once a year. Penalties and fines for late payment are collected from the client, and not from the accounts of the organization that did not pay you the salary on time.

Advantages of cards with overdraft

What is overdraft cards and what are their advantages, read on. The main advantage of it can be called the requirements for its production. Especially if you are already a participant in the salary project of Sberbank. A card with an overdraft limit 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 checking account is a guarantee of your peace of mind. In this case, there will be no overpayment for the provision of a short-term loan, and the overdraft will be closed (canceled). Further use continues with standard parameters: 18% per annum and 1 month for payment.

Advice to holders of overdraft cards

You can find out about the availability of the service on your card in several ways:

• When applying to the accounting department of the employing organization;
• In the personal account on the website of the servicing bank.

To avoid additional costs associated with the payment of accrued interest, fines or penalties, you must constantly monitor your debit account. Some terminals (ATMs) can show the total amount of available funds, including overdraft and accrued wages.

It is better to withdraw money or pay for goods / services on the next day after charging, since not always money - accrued wages - comes to the account quickly. Technical malfunctions may occur, and the write-off will be due to an overdraft, since its amount is always at your disposal.