3.

Cards:
3.1. Definition:
A payment card is a non-cash payment tool, which can be used to withdraw cash or
pay for goods and services at card acceptance points.
Payment cards offer consumers more security, convenience, and control than any other
payment tool. The wide variety of cards available – including credit, debit and prepaid
– offers enormous flexibility, as well.
3.2. Types of payment card
3.2.1. Credit card:
3.2.1.1. Definition:
A credit card is a small plastic card issued to users as a system of payment. It allows its
holder to buy goods and services based on the holder's promise to pay for these goods
and services. The issuer of the card creates a revolving account and grants a line of
credit to the user from which the user can borrow money for payment to a merchant or
as a cash advance to the user.
3.2.1.2. Form of the credit card
The credit card is made of plastic, rectangular, the standard size is 96x54x0.76mm.
3.2.1.3. Types of credit card:
 Domestic credit card: This type of card can only be used for domestic payment.
 International credit card: This type of credit card can be paid at home and
abroad directly without exchanging cash.
3.2.1.4. Function of a credit card
 Slow payment feature: When owning a credit card, you can spend in advance
for any transactions such as bill payment, online shopping, booking, airline
tickets ...
You will have 45 days to pay for the bank without any interest. After the above
period, the bank will calculate the interest rate as the lending interest rate
(interest rates depend on each bank).
For example, at VPBank, the interest rate is 3.19% for Classic cards, 2.79% for
Titanium cards and 2.59% for Platinum and co-branded cards. The date of
interest calculation for withdrawal will depend on the date of card payment in
the statement period.
 Cash withdrawals: With credit cards, customers can also withdraw cash to pay
for their payments. However, to limit withdrawals due to the extremely high
withdrawal fee, banks currently have a minimum fee of VND 50,000 per
 withdrawal. In fact, using a card is like lending money to customers so that
customers can minimize cash withdrawals.
 Pay in installment: Currently, stores or e-commerce sites have accepted
customers to use credit cards to pay by installments. You have the opportunity
to pay by installments with 0% interest rate, reducing the financial burden on
payment.
 Easy to pay : With the use of a card, you don't need have the password for card
like a regular payment card. So the payment function is extremely easy.
3.2.1.5. Advantage and disadvantage
 Advantage
- As a financial aid tool: When users need to mobilize large sums of money
in a short period of time, credit cards will be a powerful source of financial
support. This saves you a lot of time and effort in finding money.
- Convenience/ : Credit card will help you always be proactive in spending,
solving problems quickly. Currently, credit cards are accepted at most
shopping malls, shops, restaurants ... bringing the convenience of payment
without having to carry cash. Besides, you can also use the card to pay all
kinds of bills such as electricity, water bills or purchase / order on the
website.
- Expenditure management: When using a credit card, you will be sent a
bank statement for the transactions generated each month. This way, you can
track expenses in detail and make more reasonable plans in the future. In
addition, banks support mobile applications that help cardholders can
manage accounts conveniently and quickly anytime, anywhere.
- Get many incentives: Banks often offer many attractive incentives for
customers who open credit cards. The discount programs when buying
goods or services, discount when booking flight tickets, hotel rooms, ... are
the most popular incentives. In addition, there are many incentives on
interest-free installment purchases and cash refunds. For example, when
you use the international credit card of VPBank, in addition to gifts such as
movie tickets, air tickets or food vouchers, cardholders also receive
discounts at more than 700 this bank's partners.
 Disadvantage:
- Overdue interest rate: Most banks apply a 45-day interest free policy to
repay customers. However, after 45 days that amount will be charged
interest. This will make it difficult for customers to pay if they are in
difficult situation.
- High fee for cash withdrawal: When withdrawing cash by credit card,
users will be charged 4%. The multiple withdrawals will accrue into a large
fee, causing the cardholder to lose a certain amount.
- Losing money on the card when be lost: One disadvantage of using that
credit card is that when you lose your card, you will be abused by fraudsters
to make illicit transactions and lose large sums of money. Illegal transactions
can easily be done when shopping online with CVV numbers because
foreign e-commerce websites usually do not require OTP codes.
- Increase debt: In the case of excessive spending and inability to pay, you
may owe a large amount of money to the bank. Moreover, accruing overdue
interest rates will make it harder for you to repay.
3.2.1.6. How credit card works
- Accept the card: Currently, there are many shopping places that accept
payment on cards such as: Supermarkets, hotels, restaurants ... Customers
just swipe the payment card without using cash as before.
- Card verification: Many electronic verification systems are used within a
few seconds of validity of the card as well as checking whether the credit
limit of the card is sufficient for that purchase. The verification is made by a
card reader (POS - Point of Sale) connected to the receiving bank
(Acquiring Bank) of the seller. Data reader of magnetic stripe cards or
microchips on cards. The new types of cards that use the microchip are often
called chip or EMV cards.
- Payment and get a receipt: After confirming, the system will automatically
deduct money from the card corresponding to the purchased amount. Every
month, the cardholder will receive a statement showing the card
transactions, fees and total amount owed. After receiving the statement, the
cardholder has the right to appeal and reject some transactions that they
deem incorrect.
3.2.1.7. Notes on using a credit card:
- Pay attention to the time of repayment: Credit cardholders have 45 days of
interest free, interest free (subject to bank regulations). Over this period, if
you do not pay off your credit card balance, the bank will start charging
interest based on the total closing balance.
On the monthly statement date, the bank will send you a statement of
transactions for the month via the email address you have registered with the
bank. After that, you have an additional 15 days to pay off your outstanding
balance.
For example: You receive your credit card statement this month on
September 28, the due date is October 13. All transactions arising after the
statement date of the previous period (ie August 28) will be exempt from
interest and included in the statement of the next period (September 28).
Your 45 day interest free period will include 1 month and 15 days free
interest. You need to pay the full balance on your statement before October
13. After this time, the outstanding balance on the statement made on
September 28 will start to be charged interest. In addition, to take advantage
of 45 days of interest free for the next period, you should make transactions
on September 29.
- The security of the card is not really high so keep the card carefully.
When lost, need to go to the fastest bank to notify in order to block the card
to avoid falling into the wrong hands.
- Do not open many credit cards: The fee on the card is usually very high,
especially such as: Annual fee, withdrawal fee, late payment fee, interest
rate ... Therefore, opening too many cards without managing will lead to
you struggle with the fees above.
- Do not use credit cards like ATM cards: Banks do not recommend using
credit cards to withdraw cash like ATM cards. Therefore, if you use a credit
card to withdraw cash, you will incur a fairly high fee (usually 1% - 4% of
the amount withdrawn). So cash withdrawals should only be made with
credit cards when absolutely necessary.

Current Situation:
Vietnam
- Officially appearing in 2002, the first domestic debit card marked the
innovation of non- cash payment in general and card payment in
particular in Viet Nam. Up to now, the Vietnamese market has witnessed
the appearance and operation of many types of cards such as credit cards,
prepaid cards, debit debit cards, etc. According to a report by Moody's,
card payment in Vietnam has contributed about 0.14% to GDP annually,
and created approximately 75 thousand jobs for the economy in the
period of 2011 - 2015 (higher than the average of the world).
- At the end of 2018, the number of cards in circulation reached 97 million
(an increase of 8.3% compared to the end of 2017); The number of
domestic payment transactions via bank cards in 2018 reached over
292.2 million transactions with VND 592 trillion. Commercial banks
have integrated more features into their bank cards to use to pay for
goods and services. At the same time, the quality of card services as well
as the safety in card payment continue to be focused and improved by
banks.