Circular credit - creating a capital safety airbag for oneself

        Have you encountered the following situations? A friend's last-minute trip, a sudden breakdown of a household appliance, or a family member's urgent need for surgery... It's not that you can't afford it, nor are you short of assets. It's just that you don't have enough cash on hand. If you apply for a loan on a temporary basis, you will have to provide additional documents and wait for the review, which is not enough to meet the urgent needs; At this point, what you need is a flexible and easy-to-use loan tool - "revolving credit".

        General credit and revolving credit

        When most people hear 'credit', they may think of borrowing a sum of money, gradually repaying it in installments, and paying a fixed amount every month, which is called 'general credit (principal and interest amortization)'. But you know what? There is also a type of credit on the market that is relatively low-key but highly practical, called "revolving credit". Banks approve a credit limit for borrowers, which can be used and repaid at any time. After repayment, borrowers can borrow again, and interest is calculated on a daily basis, with no interest on the unused portion.

        Simply put, 'general credit (principal and interest repayment)' is like bottled water, where you have to pay for the entire bottle as soon as you open it, regardless of whether you drink or how much you drink; And 'revolving credit' is like a faucet, drinking a little when thirsty and turning it off when not thirsty. The part that is not drunk is not counted as money for now, which is free and flexible, with more choices and ease when using money.

        Table: Comparison between "General Credit" and "Circular Credit"

                'Circular Credit': Smart people's reserve fund, which can be withdrawn at any time in case of emergency, and can be safely backed up in daily life

        Many people think that credit is only applied for when they are short of money, but revolving credit is exactly the opposite. It is a backup fund that applicants can apply for in advance, which can be used at any time but not necessarily, giving people more confidence.

        Four short stories, instantly understand the practicality of revolving credit

        Story 1: Travel is stress free, it's easy to leave at will!

        Lisa usually has savings, but she just paid the annual gym fee last month and her account balance is not high. Suddenly, a friend pulled her to Japan to admire maple leaves, and there were only 3 days left for limited time special offers on airfare and accommodation. Fortunately, Lisa applied for a revolving credit and immediately used the funds to pay the travel agency fee of NTD 30000. The repayment can be made as soon as the salary is credited.

        Story 2: Don't panic when your home appliance breaks down, flexible payment without pressure

        The air conditioner at Xiaoting's house suddenly broke down, but she had just paid rent at the end of the month and didn't have enough cash. She thought of having a revolving credit and immediately used the quota to purchase a new air conditioner. She planned to repay the loan amount in six months and successfully passed the scorching summer without affecting her quality of life due to this temporary expenditure.

        Story 3: Mao Xiaozi urgently needs money for surgery, saving lives doesn't have to wait

        Xiaoyu's cat was diagnosed with kidney stones by a veterinarian and requires immediate surgery, with a cost of approximately NTD 40000. She is currently using revolving credit to pay for the surgery, and will use another two months to repay the principal and interest, in order to save the cat's life in a timely manner.

        Story 4: Self operated merchants replenish goods urgently, flexible and not overwhelming themselves

        Aliang runs a restaurant. During a consecutive holiday period, the food sold out and urgently needed NTD 100000 to purchase and prepare materials, but he didn't have enough cash on hand. He immediately used the revolving credit line and repaid immediately after the funds were recovered. He only needed to pay a few days' interest to happily earn extra income without missing any business opportunities.

        There are two main types of revolving credit, and choosing the right one is the key to truly fitting it

        Circular credit is mainly divided into two types, with different repayment methods, monthly financial pressures, and suitable groups. It is recommended to clarify the differences first before selecting the most suitable product for oneself.

        Type 1: Only pay interest, do not repay principal

        This is the most common and well-known 'revolving credit'.

        Characteristic: Only monthly interest payment is required, and there is no mandatory repayment of principal.

        Advantages: Low monthly payment pressure and flexible use of funds.

        Suitable for: people who want to reserve more cash for flexible scheduling.

        Far Eastern International Bank's "cash on call revolving credit" belongs to this type, and if the borrower's credit status is good, payment is normal, and approved by Far Eastern International Bank, it will automatically renew every year (subject to regular review and annual renewal audit results).

        Type 2: Interest payment+a small portion of principal

        Along with monthly interest payments, it is also necessary to repay a portion of the principal.

        Features: The principal decreases month by month, making it easier to manage liabilities.

        Advantages: Regular partial repayment of principal can reduce the pressure of one-time repayment.

        Suitable for those who pursue fund management while also wanting to regularly repay their principal.

        Reminder for revolving credit: Don't let "hidden fees" and "interest details" steal your wallet

        When applying for revolving credit, many people only pay attention to the start-up fee for the first application, but ignore other hidden costs, including whether there is a "usage fee" charged each time the quota is used? Is there a "renewal account management fee" charged when the credit limit expires and is renewed? Although the above-mentioned costs may seem low, they accumulate and result in significant losses, just like investing without considering transaction fees.

        In addition, although most revolving credit is calculated on a daily basis, the rules of each bank are not the same. Only by carefully understanding the details can we flexibly save interest. For example, Far Eastern Group Bank's revolving credit interest calculation method is "same day borrowing, same day repayment without interest", and the definition of "same day" is settled at the end of the day (before 23:59).

        Credit and payment are key to long-term usability

        The advantage of revolving credit is that it can be used after repayment, but the prerequisite is that the individual's credit status must be maintained in good condition and payment must be normal. After the establishment of the credit limit, the bank will regularly observe the borrower's credit status, payment status, and whether the unsecured liabilities exceed 22 times the monthly income, in order to evaluate and adjust the borrower's usage limit or automatic renewal in the following year. Therefore, to ensure the long-term effectiveness of revolving credit, the following suggestions are suggested:

        Timely repayment: Set payment reminders on mobile phones and pay the due amount on time every month.

        Control usage ratio: Avoid long-term use up to the limit threshold, and reserve space for greater safety.

        Credit is like a passport, well maintained, it can only be used smoothly when funds are needed in the future, and interest rates are more cost-effective; If neglected, the credit limit may be revoked and cannot be used even if desired.

        Circular credit can support you in times of difficulty, and can also lend you a helping hand when inspiration and opportunities arise. In the future, you will be grateful for reserving a sense of security for yourself now. Want to know how to cleverly utilize revolving credit to make life more secure and better? Welcome to the podcast program "Ten Delights, No Money in Life" 【 S3EP11 How to Choose Credit? 】? Understand the transition from life needs to loan application in one go.

                Notes:

        1. Explanation of Annual Percentage of Total Cost for Far Eastern International Bank Credit Loan: The loan interest rate range for Far Eastern International Bank Online is 2.38% to 14.88% (floating rate), and the start-up cost varies depending on each project. The total amount of various fees ranges from NTD 2588 to 7500. Based on a loan of NTD 300000 and a 5-year trial period, the annual percentage of total fees ranges from 2.74% to 15.99% (floating rate). The annual percentage of advertising exposure is calculated based on the standard calculation example provided by the competent authority. The actual loan conditions are still subject to the products provided by Far Eastern International Bank, and the actual annual percentage of each customer still varies depending on their individual loan products and credit conditions. The annual percentage of total expenses does not equal the loan interest rate. The calculation basis date for this annual percentage of expenses is May 23, 2025. The benchmark date for calculating annual percentage and future annual percentage may vary depending on factors such as the actual borrowing period and interest rate adjustments.

        2. The start-up fee for revolving credit ranges from NTD 0 to 888 (depending on each project), with an annual loan interest rate of 3.45% to 15.00% (floating interest rate), and the loan interest rate benchmark date is May 23, 2025.

        3. For details on the loan activity period and restrictions for each project, please visit the official website of Far Eastern International Bank at www.feib..Com.tw.

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