Banks always remind credit card users to pay by installments. Are they worried that users can't afford the money?

A friend of mine has never used a credit card before, because he always thought that a credit card would swallow up all his hard-earned savings. However, after understanding the benefits of credit cards, I began to try to use them later. I haven't felt so terrible since I used my credit card. I can even use it to save money. However, one thing that bothers him is that as soon as the monthly credit card bill comes out, the bank will send a text message to remind him to repay the current bill in installments. Although he has been ignoring this, he is worried that it will affect the withdrawal of credit cards and even be reduced.

Why do banks repeatedly remind users to carry out credit card installment?

Obviously, banks take pains to send short messages every month to remind credit card users to repay in installments, not out of kindness to reduce the pressure on users to repay, but to earn more handling fees. For credit card issuing banks, installment fees are the main source of income. If credit card users don't do staging, the interest of banks in promoting credit cards is estimated to be greatly reduced.

Take the above bill as an example. Although the handling fee of each installment seems to be very small, if calculated at the annualized interest rate, the handling fee of the third installment will be as high as that of the sixth installment, which is significantly higher than the general bank loan interest rate. Why don't banks want to make such easy money?

Of course, banks can repeatedly remind users to pay by installments, but whether to do so depends on the credit card users themselves. Generally speaking, if there is no repayment pressure, it is best not to repay by installments, because it will be very uneconomical. Some people may feel that they don't need to pay back the money in installments for the time being, but they can take the money for financial investment first, and then return it to the bank after making money. People who have this idea can only say that they think too much, because what kind of investment and financial management can guarantee the expected rate of return above 10%? If the expected rate of return cannot reach 10% or more, it is a loss.

However, some people may worry that if you ignore the bank's reminder and don't do the installment, it will affect the withdrawal of credit cards, or whether the credit cards will be downgraded.

Will it affect the increase or decrease if you don't do staging?

First of all, each bank's credit card withdrawal conditions may be different. Of course, it will be helpful for credit card withdrawal if it can be divided into multiple installments. After all, the main purpose of bank's credit card withdrawal to users is to earn more money from users, and installment fee is an important source of income for credit card issuing banks. The more installments, the more money banks earn. Therefore, banks are more willing to withdraw cash from credit card users by stages. From this point of view, the failure to withdraw cash by stages has a certain impact on credit card withdrawal.

Of course, it is not that there is no chance of raising the amount without staging, but it is only a little smaller than the chance of more staging. In addition, it does not mean that the more installments, the faster the withdrawal, because if there are too many installments, the bank may suspect that the user's repayment ability is insufficient, so it is unwilling to withdraw cash.

Secondly, the possibility of not reducing the quota by stages should be relatively small. Because not staging means that each bill can be repaid on time, which will leave a good credit record in the bank. For a user with good credit, what reason does the bank have to reduce the credit card limit? Moreover, just because users don't do staging now doesn't mean they won't do it later. As long as users are still using credit cards, banks have the opportunity to make money from users. If the bank really wants to reduce the credit cards of users with good credit for no reason, I'm afraid it will be chilling and eventually abandoned, and then the bank will forget everything.