Credit cards are reported to be one of the most important bank products in Georgia. Georgian citizens have to spend considerable funds to serve credit cards, but the products still remain in high demand. At the same time, commercial banks also provide active AD campaigns to draw clients by various efficient marketing tricks.
The Banks&Finances plans to cast light on how much Georgian citizens have to pay to serve credit cards and whether it is worth to take credits, in general.
Today we make focus on KSB’s credit card Next. The card’s terms on the bank’s official website are as follows:
Like all other credit cards, Next card also offers a 55 day grace period and consumers are able to use the card funds without interest rates during this period.
Nominal interest rate is 29% (in GEL);
Credit Card Limits: 200 GEL to 5000 GEL;
Commission Fee for Annual Service: 35 GEL;
Monthly minimum instalment portion: 5% of the withdrawn amount;
Withdrawal Commission Fee at KSB ATM: 3%;
We should discuss a concrete sample on the ground of these terms.
The bank approves a 2000 GEL credit limit on Next card and we have decided to pay back this sum in a year. In this case, we will have to serve the following financial obligations:
The borrower has to pay monthly 5% of the withdrawn amount (100 GEL a month) and this amount is not deducted from the principal sum. This expenditure grows by an annual 29% interest rate that is 48 GEL a month, plus a commission fee of 25 EL and cash withdrawal fee of 3% (60 GEL). To outline the real picture and determine real costs to serve the credit, we should use effective interest rate calculator of the National Bank of Georgia (NBG). The calculator demonstrates the annual effective interest rate of the Next credit card makes up 154.3%.
At the same time, the borrower must strictly follow the payment schedule, because even one delayed day of payment costs 15$.
Thus, taking into account all the abovementioned, it is upon the client to decide whether to take KSB credit card Next.