Bank

Credit Card Interest Rates Skyrocket to a Shocking 37% Annually

Since early November, numerous banks have adjusted credit card interest rates upward, responding to rising capital costs and increased year-end spending demands.

Administrator

1 December, 2025

As the year-end approaches, credit card spending tends to surge while bank liquidity tightens compared to earlier months. To proactively manage credit risk and balance capital costs, many banks have raised credit card interest rates as a technical precautionary measure.

Year-End Interest Rate Hike Race

Bank BIDV recently announced adjustments to international credit card interest rates for individual customers, effective November 21st. Specifically, the BIDV VISA Easy card rate increased from 11.5% to 12% annually; the standard card rate rose to 22% (previously 18% annually). Premium cards like Signature/Infinite increased from 16.5% to 18% annually, while Platinum/World/Ultimate cards now max out at 20% annually.

Similarly, Vietcombank announced new rates effective November 20th. This move by the industry giant drew attention with increases ranging from 3 to 4.5 percentage points depending on the card tier.

Credit card interest rates show a clear divide between state-owned and private banks. Illustrative image

Under Vietcombank’s new rates, standard individual cards jumped from 18% to 22% annually (a 4-point increase). Gold cards increased from 17% to 21% annually.

Notably, Platinum/World (individual) and Platinum (SME) cards saw the largest increase, from 15% to 19.5% annually. VIP customers holding Signature/Infinite cards now face an 18% annual rate, a 3-point increase. This marks Vietcombank’s first adjustment this year.

Earlier, VietinBank implemented new rates from November 10th. The bank set a uniform 22% annual rate for both individuals and businesses, a 3.5-point increase from the previous 18.5%.

This hike brings VietinBank’s rates in line with Vietcombank’s standard card ceiling, signaling a new consumer lending rate plateau of 20-22% among state-owned banks.

Among private banks, OCB also announced new rates effective November 20th, 2025. Adjusted rates reached up to 37% annually, a 4-point increase from the previous 33%.

In recent years, credit card usage in Vietnam has grown rapidly. A recent report shows that by the end of 2024, Vietnam had nearly 138 million financial cards in circulation, with debit cards accounting for about 89%. However, credit cards are the fastest-growing segment with a compound annual growth rate of approximately 19.1% from 2019 to 2024.

Customers increasingly prefer cashless payment methods. Photo: T.L

Why Are Rates Climbing?

A deputy general manager at a state-owned bank explained that this isn’t solely due to capital cost pressures but also relates to current card issuance practices. Easier card approval conditions create latent credit risks.

“I understand some private banks reference credit limits from major banks (Big 4). If a customer has a card and limit with the Big 4, the new bank will issue a card with a similar limit without further assessment. This lenient issuance fuels rapid credit growth but heightens default risks. Rate hikes act as a risk mitigation tool, offsetting potential non-payment,” they said.

This executive added that rate increases directly result from relaxed approval mechanisms and the need to control individual credit risks.

Credit card interest rates have surged sharply (up to 22-40% annually). Photo: T.L

Dr. Huỳnh Trung Minh, a banking finance expert, noted that credit growth is outpacing deposit mobilization. While deposit rates have risen, lending rates haven’t adjusted accordingly, squeezing net interest margins (NIM).

“Raising credit card rates is a quick solution to bolster NIM and enhance revenue from high-margin consumer lending without significantly impacting traditional loan rates,” Minh analyzed.

Minh also warned of the paradox where card user growth outpaces understanding of the product. This knowledge gap leads many cardholders to overspend, make minimum payments, and incur high interest charges.

“If this trend continues without improved financial literacy, banks may face rising bad debts while users suffer credit score damage and reduced long-term borrowing capacity,” Minh cautioned.

Some experts observe that as the year-end approaches, consumer demand peaks, and credit card spending typically increases. Credit cards aren’t just convenient payment tools but carry significant financial risks if users misunderstand mechanisms, mismanage spending, or fail to make timely payments.

Essentially, credit cards function as unsecured short-term loans with interest rates typically higher than secured loans. Cardholders usually enjoy a 45-55 day interest-free period if they meet payment deadlines and settle the full statement balance. Timely full payments before the bank’s due date incur no interest, regardless of rate changes.

Users must also note various card fees beyond interest. These include annual fees, closure fees, cash advance fees, etc., which vary by card type.

Effective Financial Tool When Used Properly

Experts emphasize that credit card interest accrues only when cardholders miss payments or settle less than the full statement balance. Timely full payments incur no interest on regular purchases.

With sensible spending management and utilization of the 45-55 day interest-free period alongside cashback and rewards programs, credit cards offer superior benefits over cash. Fundamentally, the “spend now, pay later” mechanism functions as an unsecured short-term loan, aiding cash flow management in urgent situations.

THÙY LINH

– 07:02 30/11/2025