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 at that time because my salary landed on every biller and groceries I have to deal with when I was advised by my mother.
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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 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.
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((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’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.
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 an account-related issue. You can directly email GCash or Fuse Lending:
[email protected] or [email protected]
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