Nowadays, credit cards are widely used, and the demand for them is high, leading to the widespread availability of "credit card renewal" services. However, renewing credit cards is an illegal activity. Beware!
- What is credit card expiration?
Credit card debt refinancing is a service where cardholders borrow money from a third party to pay off their credit card debt when the payment due date arrives and they lack sufficient funds. The service provider deposits money into the account to settle the outstanding credit balance. Then, the service provider will continue to use a POS machine to retrieve the newly deposited funds immediately after the bank reinstates the credit limit for the cardholder in the next statement period. Debt collection is carried out in the form of purchases (but in reality, no goods are actually bought).
- Potential risks
- Legal risks: In essence, credit card refinancing is a form of short-term borrowing, carried out by illegitimate individuals and organizations. Withdrawing money after the credit limit is reinstated involves providing fictitious service invoices to the bank, as the customer does not purchase anything but only uses the cash withdrawal service. These are invalid transactions and prohibited by banks. Participating in fictitious transactions can lead to serious legal problems, including criminal prosecution.
- Risk of personal information leakage: Credit card renewal service providers may retain credit cards until cash is processed and fees are charged, or request cardholders to send relevant credit card information such as CVV/CVC security codes , card numbers, ID card photos, OTP codes sent to phone numbers, etc. This is important information that needs to be kept confidential and should not be shared with anyone. Malicious actors can exploit this data for harmful purposes, especially using it in online payment transactions to steal cardholders' assets.
- Card blocked and credit score lowered: If credit card renewal services are used excessively and continuously, banks will warn of suspicious transactions, and the card may be temporarily blocked or spending limited for monitoring. This will negatively impact the cardholder's credit score and create difficulties for future financial activities within the entire banking system.
3. Recommendations from VPBank
Any form of fraud or circumvention of regulations in the use of credit cards will be dealt with severely according to the law and the bank's regulations. Therefore, VPBank advises:
- Use credit cards wisely : Plan your spending carefully and take advantage of the many benefits offered by your card.
- Pay on time : Ensure you pay your credit card debts in full and on time to avoid incurring high interest rates and negatively impacting your credit score.
- Use legitimate banking services : VPBank offers many products and features to support customers with urgent financial needs: unsecured loans, overdrafts, installment payments for credit card expenses with attractive interest rates, etc., avoiding illegal services and unclear transactions.
- Contact your bank when facing financial difficulties : If you encounter problems with payments, contact your bank for assistance and to find a suitable solution, avoiding falling into bad debt.
If you have any suspicions of fraud related to VPBank, please report it to the nearest VPBank branch or send a support request to:
VPBank would like to inform you and wish you convenient and secure payment experiences with VPBank's products and services.
Best regards.
Source: https://www.vpbank.com.vn/tin-tuc/tin-vpbank/2024/dao-han-the-tin-dung-mot-hoat-dong-phi-phap
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