What You Need To Know About Credit Card?
There’s usually a misconception that credit cards are there to make you a slave of the bank, because of the interest rates and charges associated with its use. However, as with any debt, it’s about how you manage it, from how you use it to how you service it. If well managed, the credit card is a very powerful tool.
Credit Cards are a soft landing for monies that can be accessed immediately. There are no charges if the amounts from your card are not accessed, other than the annual fees. With the Chase Bank Credit Cards, you get the following benefits;
- Discounts. When you do not have enough money to benefit from a discount, a credit card comes in handy, because you could purchase such items on discount and have the amounts repaid at your convenience. For example we currently have a sale for Tiles & Carpet and Fairdeal Furnitures.
- Online transactions: It’s safer to use your credit card for online transactions as opposed to your debit card. This is because amounts that can be accessed are limited to the credit limit unlike for a debit card that is unlimited.
- Points. With the Visa Gold Card you get a point for every KES 500 spent, and you can redeem the points locally. While with the Mastercard Reward Credit Card you get a point for every USD 1 equivalent spent, and you can redeem the points internationally, covering selected airlines, hotels and car rentals.
- Access to travel insurance.
- Flexible repayment options for as low as 10% of your outstanding bill.
- Up to 50 days interest free credit on your purchases.
- Waived annual fees for 2015 and a free supplementary card.
What are the main requirements during application for a credit card?
- Filled application form.
- Latest 3 months bank statements.
- Source of income: Latest pay slip or your certificate of registration (for a business person).
- Copy of ID or passport.
The TAT’s for approval or rejection?
Approval/ rejection will be done in maximum of 48 hours. (Assuming the entire data is provided).
What credit limit do I qualify for?
- Up to 1.5 times of your net salary depending on your DSR (Debt to Service Ratio)
- For businesses it depends on your turnovers, account conduct and remaining balances.
What are the reasons one’s credit card app gets rejected?
- Exceeded DSR (Debt to Service Ratio): You should take home a third of your gross pay or half of your net pay.
- If your net income is below KES. 30,000.00.
- If your terms of employment are not steady (For instance, if you’re on probation or it’s your 1st contract).
- If you do not have roots in the country.
- If you do not bank with a bank registered in Kenya.
- If entire documentation is not provided
- If you are listed on CRB (Credit Reference Bureau) as a defaulter.
How do I manage my credit card instead of having it manage me?
- Avoid withdrawing monies from the ATM. This is because the fees charged for such withdrawals are high.
- Pay as much as you can before your due date. This will ensure that your interest rate amount remains low. Alternatively, if full payment is done before or on the due date, then there will be no interest charged on the card, especially if used for shopping (POS) transactions.
- Monitor your card transactions and statements very closely to ensure you are keeping track of your expenses and payments.
- Also remember that, proper management of your credit card payments helps you build your credit profile or credit history, which will come in handy when you’re seeking for a loan such as a mortgage.
What happens if I lose my job and I am not able to pay back my debt?
You can come to the bank and we can agree on a way of meeting your credit obligations. The options include;
- Freezing the interest amount so that it doesn’t grow to the point you can’t pay.
- The credit card debt can be changed into a loan for a period that works for both you and the bank.
How do I manage my Interest Rates?
The credit card has two important dates: the statement date and the due date. With the Chase Bank credit card system, the statement date is on the 15th of every month and the due date is on the 5th of the following month.
- All transactions done between 16th of Month 1 and the 15th of Month 2 will appear in a statement on 15th of Month 2.
- Payment will be required by the 5th of Month 3. Interest will be calculated on outstanding amounts that appear from the 6th of Month 3.
- To avoid paying interest, pay for the entire amount that shows up on your statement by your due date.
How do I handle over limits?
The reason you will go above your limit, is mainly because of bank charges such as interest or annual fees. The other possible way is if you request for an increased limit. This will usually happen because you are in a fix and need a quick solution such as being stranded at an airport, or there is a hospital bill that needs to be cleared. Key for this is you need to have been a regular user and payer of your credit card.
What are the implications of defaulting on a credit card payment?
- List you on Credit Reference Bureau which in turn affects your credit score.
- Attempts will be made to recover monies from your bank account.
- You could be taken to court.
- Your properties could be auctioned.