What is credit card expiration?

Credit cards are a type of card that allows users to borrow money to use and pay it back later. When the credit card payment due date arrives and the customer is unable to pay, they can use credit card refinancing services to borrow money from companies that provide debt repayment services to banks.

The credit card debt repayment service provider will deposit a sum of money into your account to pay off your credit card balance.

When a user's credit limit is reinstated by the bank, the service company will swipe the card through a POS machine to collect the debt and renewal fees. The outstanding balance on the card will then be added to the next statement.

Credit card repayment process

Credit card repayment is a service with a relatively simple process:

First, the service provider will deposit money into the credit card holder's account.

- Next, the bank calculates and reduces the debt, creating a new monthly spending limit for the customer. Please note that the bank's transaction is not related to the credit card repayment service.

- After the bank has allocated a credit limit for the new month, the service will proceed to collect the debt and service fee by having the customer swipe their POS machine.

- Completed transactions will be displayed as normal shopping activity in the statement, even though no actual shopping activity took place.

Paying off debts via POS card swiping instead of ATM transactions helps reduce transaction costs.

Furthermore, paying off your debt via POS machine will not incur credit interest charges for customers during the 45-day repayment period of their credit card loan.

Potential risks

Credit card repayment services offer many benefits but also pose several risks for customers, such as:

- Personal information leaked: Some lenders require customers to send information related to their credit cards, such as CVV/CVC security codes, card numbers, photos of their ID cards, and OTP codes sent to their phone numbers. Some even retain customers' credit cards until they have used them to pay off their loans.

Therefore, customers are very vulnerable to having their information exposed to loan sharks or having their ID cards/citizen identification cards used for malicious purposes.

- My card has been blocked by the bank. Essentially, credit card renewal is a form of "underground" credit extension, bypassing the bank to extend the debt to the next period. Repeated and excessive use of this service will inevitably raise suspicion from the bank.

Banks may flag suspicious transactions and temporarily block cards to enhance monitoring of the cardholder's account. This can negatively impact your creditworthiness with the bank.