Can I repay my credit card in instalments?
Credit card installments can be paid in advance. Whether it's a cash installment or a bill installment, most banks allow you to choose to repay early. You can usually choose a prepayment option through credit card customer service** or credit card-specific software.
After early repayment, if you choose to cancel the instalment, the remaining principal amount of the instalment will be credited to the next invoice and the repayment amount required under the next invoice will be repaid by the last repayment date. It is important to note that credit card installments charge an installment management fee, which can be considered as interest to a certain extent. Typically, the credit card installment administration fee is around 06%, rates vary from bank to bank.
However, if you choose to repay your credit card instalment early during the process, you will incur a penalty. There are two ways to collect liquidated damages:
1) In the event of cancellation of the installment payment, the ** fee previously charged will not be refunded. Subsequent ** fees must be refunded in a lump sum.
2) In the event of cancellation of the installment, the administration fee previously charged will not be refunded. The remaining administration fee for instalments will not be charged, but a penalty of 3% on the remaining outstanding principal amount will be charged.
The confusion of why it is still necessary to pay the prepayment fee from the perspective of default can be explained. Since early repayment cancels the repayment amount of the previous period, from the bank's point of view, it cannot charge a subsequent management fee, which will lead to a certain loss, which must be borne by the cardholder.
Another frequently asked question is, why do you continue to charge an administration fee after canceling your instalments? This is because some banks continue to charge management fees as per the normal procedure even if they cancel the instalment after early repayment. So, no matter which way you go, there's a fee to pay off your credit card installment early.
It's worth noting that credit card installments can help banks make a profit and can also increase your interaction with the bank. This can help improve your overall score, which in turn can help increase your credit card limit. However, not all credit card installments can increase the limit, and it also depends on a variety of factors.