My Honest Review of Sberbank's 120 Days Interest-Free Credit Card: Is it a Game-Changer or a Trap?

I've been using credit cards for years, but I recently discovered a new one from Sberbank that's got some amazing benefits. The Sberbank MIR 120 days without % credit card is a game-changer, but it's not without its pitfalls. I'll share my honest review of this credit card and give you the lowdown on how to use it effectively.

What the Sberbank MIR 120 days without % credit card looks like, from irecommend 2024
I've been using my Visa Gold credit card for the past 3 years, but I recently found out about the new Sberbank MIR 120 days without % credit card, which has even better conditions. I decided to close my old credit card and get a new one, so I could take advantage of the 120 days interest-free period. But, I soon discovered that you can't close the Visa Gold credit card through the app, so I had to go to the bank to close it. The Sberbank employee told me it would take 1.5 months to open a new card, but I'd read on forums that it only takes 8 days. Eight days after I closed my Visa Gold credit card, I got an SMS on my phone saying I could already open a new SberCard MIR, so the Sberbank consultant just made up an answer to my question - it's obvious, right? As soon as I got the SMS notification, I went to the Sber app and applied for a new credit card with 120 days without %.I had a credit limit of 210,000 rubles on my Visa Gold card, but the limit for the SberCard MIR wasn't displayed for some reason, so I asked for a credit limit of 90,000 rubles. I just had to enter my monthly income in the app - no need to specify my workplace, marital status, whether I have kids, phone numbers for all my relatives, my safe combination, or anything else like that, like with other banks. You only need to enter the desired credit limit and your approximate monthly income, and no one will check your income or whether you're actually working - it's just a robot that checks your credit history with the credit bureau. You can view the contract in digital form right away when applying for the credit card.

After I applied for the credit card, I got a notification that I'd been approved for a significantly higher credit limit.

Sberbank Credit Card 120 Days No Interest Conditions ReviewSberbank Credit Card 120 Days No Interest Conditions Review irecommend 2024I opened the app and reduced the limit to 150,000 rubles. The card was issued in a digital format in my app, and I could already pay for purchases online, but I decided to issue it in plastic immediately, went to Sber. The consultant served me for 5-10 minutes, immediately brought me the card and asked if I had a credit card from Sber before, I said I had a Visa Gold, and she replied that the conditions for the "MIR" card are the same as for my previous credit card, Visa Gold, except that the interest-free period is 120 days instead of 50 days. She also told me not to withdraw money from it, so I wouldn't get charged interest. She didn't give me a printed contract, I asked, "Don't I need to sign any documents?" The consultant replied that no, because I had already signed an electronic contract in the app. Although when I took out "Visa Gold" 3 years ago, I also issued it in the app, but they did give me a printed contract to sign.

I grabbed the card, came home, and looked at the conditions in the app.

Sberbank Credit Card 120 Days Conditions and Reviews irecommend 2024The card's maintenance is completely free:

Sberbank Credit Card 120 Days No Interest Conditions and Reviews irecommend 2024 The interest-free period on the card is 120 days, i.e., almost 4 months:

Sberbank Credit Card 120 Days No Interest Conditions and Reviews irecommend 2024Sberbank Credit Card 120 Days No Interest Conditions Review irecommend 2024The credit account on this card starts from the 1st day of each month, regardless of when you issued and received the card in your hands. I issued my card on September 26th in a virtual format, and received it in plastic on September 28th. But the credit account on my card starts from the 1st day of the month in which I make my first purchase. So, if I paid something with it on the 28th, 29th, or 30th of September, the credit account would have started from 1st September, because my first purchase was made in September, not October.

I'll stop here on these two points:

Calculating interest on Sberbank's 120-day interest-free credit card: a review from irecommend 2024 What's a 'late payment'?

A late payment is when you don't pay the minimum required amount on time. From the very next day, interest, penalties, and more start getting added to the list.

What's a 'minimum required payment'?

The minimum required payment is the smallest amount you need to pay each month for the entire duration of the loan. The bank sets this amount, and it's outlined in the contract you sign when you get the credit card. The rules and payment schedule are all spelled out in the contract.

I've been using the Sberbank 'MIR' credit card for a few months now, and I've got to say, it's got some pretty sweet conditions. Starting from the second month, you've got to pay at least 150 rubles (I'll explain why it's 150 rubles and not 1% later) up to 3% of the outstanding balance from the first month. If you don't pay that 150 rubles by the end of the month, you'll get hit with 36% interest (for the late payment) on the original balance, even if you've paid off 99% of the debt. You'll have to pay the remaining 1% plus those 36% interest on the original balance.

On my old Visa Gold card, I used to get late payments because it didn't send me free SMS reminders about the minimum payment due date, which was the 26th of each month. I'd always forget, and it was easy to get hit with interest. But the 'MIR' card has got some great features: a 120-day interest-free period, a payment due date of the 1st of each month, and free SMS reminders to help you stay on top of your payments. I'm pretty sure I won't be getting any late payments on this card.

What's an 'interest-free period'?

The interest-free period is the time when the bank doesn't charge interest on your payments. If you pay off your balance before the interest-free period ends, you can use the credit card for free. Some banks require you to pay off the previous month's balance to activate the interest-free period in the new month.

I've got to say, the interest-free period on this card is a whopping 120 days. That means you'll need to pay off the entire balance by the fourth month. If you've been making regular payments, but still have a balance of just 1 ruble left over by the fourth month, you'll be hit with a 27.6% annual interest rate (after the interest-free period ends) on the original loan amount. The interest will be charged once a day. But if you pay off the remaining balance in full by the end of the fourth month, you won't have to pay any extra interest. For example, if you borrowed 70,000 rubles, you'll just need to pay back the full 70,000 rubles.

When you pay off the entire loan balance on your credit card (regardless of whether you've had interest charged beforehand), the 120-day interest-free period starts all over again, and interest won't be charged on any new balance for the next 120 days (as long as you're making the minimum monthly payment).

From the first month onwards, you'll need to make the minimum monthly payment on your credit card once a month. The minimum payment is not an extra fee, but rather a payment towards your outstanding balance. In my contract and the card's terms, it's stated that the minimum payment should be at least 1% of the outstanding balance, but no more than 3%. However, during my four months of using the card, I discovered that there's a fixed minimum monthly payment of 150 rubles, which you can't go below, even if you have a minimal outstanding balance:

Sberbank Credit Card 120 Days No % Conditions Reviews irecommend 2024 I'm still trying to figure out why Sberbank didn't include this information in the contract and general terms.

Now, let me give you some examples:

Example 1: You got your credit card in January, regardless of the day, or you got it in a different month, but your card has no outstanding balance. By January 31 (inclusive), you spent 40,000 rubles on the card, for example, you bought a fridge and decided to use the credit card only to pay off the fridge's balance for the next three months.

So, in January, you won't have to make any minimum payments. That's your spend month - you're just using the card to pay for things like a fridge, groceries, clothes, and a doctor's visit. In February, you'll see the minimum payment amount in your account (I'll use 150 rubles as the minimum payment, since that's the smallest amount you need to pay). You'll need to make that payment by the end of February. After you make the minimum payment in February, in March, you'll see the minimum payment amount again, and you'll need to make it by the end of March. Once you've made the minimum payment in March, in April, you'll see that you need to pay off the entire debt by the end of April to avoid interest, which means you'll need to pay 39,700 rubles by the end of April:

Credit card Sberbank MIR 120 days without interest as used by irecommend 2024You can also make payments each month that are more than the minimum payment, and your debt will decrease by the amount you pay.

Example 2: Let's say you decide to use the credit card like a debit card and spend money from it each month. In January 2024, you spent 1,000 rubles, in February 2000 rubles, in March 3000 rubles, in April 4000 rubles, and so on:

Credit card Sberbank MIR 120 days without interest as used correctly by irecommend 2024In this case, in January, you don't make any payments, since January is your spend month. In February and March, you only need to make the minimum payment (which I'll use 150 rubles). And in all the subsequent months, you'll need to make the minimum payment + the amount of the debt that's accumulated 4 months earlier:

Credit card Sberbank MIR 120 days without % tricks pitfalls as used by irecommend 2024So, you'll still be paying off the debt from 2024 in the first 3 months of 2025. You spent 78,000 rubles in 2024 - by the end of April 2025, you'll need to pay 78,000 rubles, assuming you make the minimum payments + the debt from previous months each month, and don't miss any payments.

Since I always manage to pay off the debt within the interest-free period, I haven't been charged interest on the card yet. However, Sberbank doesn't explain how to calculate interest on their website, so I had to look it up online:

Formula for calculating interest on a credit card:

Unlike interest rates, which are fixed in the contract, their exact value in monetary terms can only be calculated after the end of each billing period.

I've noticed that the credit card balance can change multiple times within a given period, and the interest charged isn't just dependent on the interest rate for each type of transaction, but also on the outstanding balance and the time it's been outstanding. To put it simply, the formula for calculating interest on a credit card looks like this:

Credit Card Sberbank 120 days without % how to use it correctly from irecommend

Where

S – the interest for the reporting period

P – the outstanding balance, i.e. the actual amount spent

I – the interest rate

N – the number of days in a year

n – the number of days the money was used.

For example, let's say a cardholder with a credit limit of 200,000 rubles paid for a 100,000 ruble laptop using their credit card. The card has a 100-day grace period, and the interest rate for purchases is 20% per annum. Even though the client managed to return 90,000 rubles by the 101st day, the grace period for this purchase is cancelled because the debt on the card wasn't fully paid off.

Interest on the credit is calculated from the first day the debt arises. In this case, the overpayment would be:

100,000 × 20% ÷ 365 × 101 = 5,534 rubles.

I'll use the scheme above to calculate the interest on the Sbercard "MIR", replacing 20% with my 27.6%:

For instance, on January 1st, you bought a laptop for 100,000 rubles, and after that, you didn't use the credit card anymore, only paying off the debt on it. In February, you paid the minimum payment of 150 rubles, in March, you also paid 150 rubles, in April, you paid 95,000 rubles, leaving a debt of 4,700 rubles, which you didn't pay off by the end of April. On the 121st day, you were charged 27.6% on the initial debt of 100,000 for the entire 121 days of using the money:

100,000 × 27.6% : 365 × 121 = 9,149 rubles, which you'll need to pay back on the card on the 121st day +

add another 4,700 rubles of outstanding debt.

If you don't pay off the entire debt with interest within a year, i.e. by December, but continue to make minimum payments each month, by December 31st, you'll need to pay back:

100,000 × 27.6% : 365 × 365 = 27,600 rubles. That means you bought the laptop for 100,000 rubles in January and paid it off in December, ultimately paying a total of 127,600 rubles.

I'm not sure I've ever seen prices drop on anything (excluding discounts), and considering prices only rise, sometimes even by the day, especially on electronics – like that laptop – it's likely that the laptop you bought in January would cost significantly more by December-January, and if you were to buy it in December or January of the following year, you'd end up paying roughly the same amount to the bank with interest as you would have if you'd paid it off in full. I think that's why using credit cards and buying now, when prices only rise, still makes sense.

I'll write more about paying with a card later, but for now, let's just say that it's a good idea to make payments at least a couple of days before the end of the month. I've read on forums that some people have experienced delays in their payments, which can lead to late fees. In my personal experience, I've never had any issues with my "Visa Gold" or "МИР" cards, but I've had instances where the payment took a few hours to process. To avoid any problems, I try to make the minimum payment at least 4 days before the due date.

Rules for using your credit card to avoid interest charges:

Try to pay off your balance and make minimum payments a couple of days before the end of the month. Keep in mind that payments can take anywhere from a few hours to a day to process. If you make a payment after the interest-free period has ended, you'll be charged interest. I've personally made payments on the last day of the month (30th) and still received instant credit. I transfer money from my Sberbank debit card to my credit card without any fees. However, I've seen reviews from others who've experienced delays and had to wait several hours for their payments to process.

Don't withdraw cash from an ATM using your credit card.

Don't transfer money to other accounts, including Sberbank accounts.

Make sure to pay the minimum payment on your credit card by the 1st of each month. If you're transferring money from another bank using Sberbank's mobile payment service, you'll need to send the payment to your phone number linked to your Sberbank account. The payment will be credited to your debit card, and you can then transfer it to your credit card. You'll receive several SMS reminders throughout the month to make payments, so you're unlikely to forget.

Don't use your credit card to buy lottery tickets or online games and casinos. I was surprised to learn that some people in Russia still buy lottery tickets, and there are many of them!

Don't use your credit card to buy foreign currency.

You can use your credit card to pay for purchases in offline stores and online, pay for transportation, mobile phone bills, pay for utility bills, pay for beauty salon and medical services, pay for education, buy train and plane tickets, and pay for food and drinks in restaurants and cafes without incurring interest charges. Just make sure to pay through the merchant's terminal or the Sberbank app, or enter your card details during the online transaction. Avoid using the mobile payment service, as you'll be charged interest immediately.

The benefits of the Sbercard "МИР":

Free card maintenance

Free SMS notifications about transactions and outstanding balances

SMS reminders to make minimum payments will arrive several times a month

A generous 120-day interest-free period

No need to specify your workplace

One thing that really stood out to me was that they don't check your income information before issuing the card.

Another thing I noticed was that the interest-free period starts on the 1st of every month, not the date you sign the contract.

The downsides of the Sberkarta "MIR" credit card:

High interest rates when you're late with payments are a major concern for me.

There are also fees for transfers and withdrawals at ATMs.

And to make matters worse, the contract doesn't even specify a minimum payment amount of 150 rubles.

That 150 ruble minimum payment really threw me off - it's not even listed in the contract. It's like the bank is hiding some of the conditions. I've had a credit card with Visa Gold before, and that contract had a minimum payment amount of 120 rubles. I'm left wondering what other conditions or hidden fees might be lurking in the fine print, so I'm taking off a star.

Check out my review of the free debit card from Sberbank, Momentum, which they're still releasing in 2024: click here