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 it, I can finally share it 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 that time because my salary landed to every biller and groceries I have to deal with when I was advised by my mother.
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
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 hope no one gets charged for these amounts. Okay?
The other charge is called interest
So this is the most confusing part. They charge 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 its 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.
(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%
13 pesos is your current interest charge for that August 1 purchase. It will run until you finally settle that amount.
((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:
It’s just a matter of rounding off.
In my current bill, I got charged for 200 penalties for the past month payment issues and 76.23 for the interest. I only had two purchase 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 purchase 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.
Related: Wise Usage of 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 account related issue. You can directly email GCash or Fuse Lending: