credit Archives - Madam Miely

After my recent post about getting approved with GCredit using the Globe's Gcash app, I usually get asked about how the finance charges or the interest works. To be honest I feel quite confused as well when I read their terms and conditions but after using them, I can finally share them with you. Now that I understand their finance charges I am happy to tell you how these works. Honestly, in the first month, I missed a payment for a few days since I let my mom use my sim card for a while after she lost her globe sim. Just a heads up they call as soon as a day of a missed payment. Apparently, I wasn't able to prepare for paying it at that time because my salary landed on every biller and groceries I have to deal with when I was advised by my mother. https://madammiely.com/blog/money-matters/globe-gcash-full-review-2018/ Having that said I bet you wanna know what are the types of finance charges they give their users. There are two. Let's start with Penalties for GCredit As mentioned above, I wasn't able to pay on time. After your due date, they'll charge you a fixed amount of 200 pesos as a penalty for late payment. This is the first time I got charged for a penalty and I feel so bad about it. 200 pesos is as much as my 2 days of travel allowance for work. They charge you more if it's late more than 30 days so here's the list: 31-60 days - 500 PHP 61- 90 days - 900 PHP 91+ days - 1500 PHP I don't know if this charge will stack or how it works but I hope no one gets charged for these amounts. Okay? Other finance charges for GCredit like Interest So this is the most confusing part. They charge an interest of 5% for every 30 days. In the past when I just got approved, I thought it works like with credit cards. When you purchase with a credit card it doesn't charge you any interest as long as you pay it in full before due dates. With Gcredit, they charge a prorated amount of interest from the day of purchase. The interest will be shown on the statement but it's already counting as soon as you use it. I will give you an example. Aug 1 you purchased an item for 1000 pesos. Today is August 9. Your purchase is 8 days old now. So we can use two formulas here. Formula 1: (5%/30days)*(no.of days) interest rate Purchase amount*interest rate running interest charge So for the said purchase above it gonna work like this: (.05/30)*(8).013 or 1.3% 1000*.01313 13 pesos is your current interest charge for that August 1 purchase. It will run until you finally settle that amount. https://madammiely.com/blog/money-matters/new-gcash-feature-that-i-am-so-excited-aboutgcash-invest-money/ Formula 2: ((Amount*5%)/30days)(no of days)interest charge That formula should work on a scientific calculator. But to do step by step follow this below: 1000*.0550 50/301.66 1.66*813.28 It's just a matter of rounding off. In my current bill, I got charged for 200 penalties for the past month's payment issues and 76.23 for the interest. I only had two purchases for this billing cycle and the balance that was paid late is 1594.24. Basically, it runs with a prorated interest since it was paid on July 29 which is included in this cycle. So I computed those two purchases and outstanding for the interest and it gave me an answer of 76.9 pesos. I'm unsure of the computation for the outstanding though. 1594.24*.05 / 30 * 20 53.14 565.55*.05 / 30 * 10 9.43 1433.25*.05 / 30 * 6 14.33 Anyway having the idea on how to compute the charges is good enough even though we don't really get the exact amount. https://madammiely.com/blog/money-matters/wise-usage-credit-card/ In my own thoughts, GCredit isn't really good for regular purchases. It's more like an emergency fund for your groceries. I don't really suggest using it regularly because it would make your expenses a bit higher. It's still better to use debit cards or credit cards for cashless transactions. Of course, we don't really expect a lending company to give you 0% interest for purchases to be paid within the due date. However, GCredit should somehow mimic this kind of advantage you get on regular credit cards. So I hope this article helps. If you have other questions or comments feel free to ask. Although I can't really answer an account-related issue. You can directly email GCash or Fuse Lending: gcashinquiries@globe.com.ph or wecare@fuselending.com https://madammiely.com/blog/money-matters/just-got-approved-gcredit/ Don't forget to subscribe and follow

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Understanding Finance Charges When Using GCredit

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