Experts say credit card users must make certain they understand their cards' terms of use and debt policies. — VNA/VNS Photo

HÀ NỘI — People should check and double-check their credit cards' terms and their issuers' debt management policies before signing up for one, said industry insiders.

The message came after a recent case in which a user from the northern province of Quảng Ninh was notified he owed the bank VNĐ9 billion (US$364,000) after he allegedly used his card to make two purchases for a combined total of VNĐ8.5 million in 2013, 11 years ago.

The card issuer the Quảng Ninh Branch of the Vietnam Export Import Commercial Joint Stock Bank (Eximbank) said the user's debt was estimated as of October 31, 2023, at VNĐ8,838,869,549 with the principal debt of VNĐ8,554,625 and the interest debt of VNĐ8,830,314,924.

According to the bank, since September 14, 2013, the debt on the card has become bad debt. The bank said it has notified and worked with the customer many times but both sides have yet to come up with a solution for the debt. Eximbank said issuing debt obligation notifications to customers is a routine business activity in the process of debt handling and recovery.

However, industry experts said that most banks usually write off the debt once it is classified as a bad debt after tallying together principal, interest and penalties. Therefore, even after ten years, the interest amount should be capped at around VNĐ60 million at most, allowing the debtors a realistic chance to repay the debt.

Banking expert Nguyễn Trí Hiếu said it's not possible to determine who's right and who's wrong without getting into the documents and contracts signed by the two parties.

But a small amount of debt can become significant due to the bank's calculation method, including compound interest and penalty interest, which is often extremely high.

Lawyer Đặng Văn Cường from Hà Nội said the user must demand the bank to disclose their interest calculation methods and verify whether the bank has issued sufficient notifications regarding the debt amount. It's also important that the user looks into the transactions done 11 years ago to ensure their legality.

In an earlier exchange with the press, a representative from the State Bank of Vietnam (SBV) said the central bank would only answer to the demand of a court of law if and when both sides decide to bring the matter to court. Otherwise, directly interfering in a civil dispute is not part of the central bank's function.

Eximbank Quảng Ninh said it had transferred the case to the bank's headquarters in HCM City. — VNS