Credit Limit Repayment

When issuing a credit card, the bank sets a credit limit – the largest amount that you can spend paying by card. All or a part of the drawn-down credit limit must be repaid by set instalments.

Repayment by instalments

An agreement you have concluded with the bank specifies when and in what amounts you will have to pay by instalments, if you have used the credit limit. An instalment usually consists of two parts: credit repayment (debt repayment) amount and interest.

The most important thing is to pay the instalments. If you have extra money, you may pay the instalments anytime and repay your debt earlier.

Repayment methods

The drawn-down credit limit of different cards is repaid in different ways. Repayment maturity and amount of instalments depends on the credit limit repayment method. There are three credit limit repayment methods:

• equal instalments – a fixed amount must be transferred to the card account every month. The amount is chosen by the card holder when ordering the card. If the amount of debt is lower than the instalment fixed, only the debt amount must be repaid. Usually, instalments are automatically debited to another account indicated by the customer;
• revolving – at least 5% of the debt must be repaid every month. Interest is calculated separately. The cardholder must pay instalments, or they are automatically debited to another account indicated by the cardholder;
• charge – the whole debt must be repaid by the established date (usually by the end of the month). Interest is calculated separately.