Credit cards are instruments of access to instant financing that in many cases can get us out of trouble. However, making inappropriate use of this source of loans can cause us to fall into a vicious circle that condemns us to pay off endless debts at extremely high rates.
Withdrawing money from your credit card can mean paying interest of up to 127%, according to Marcelo Mundaca, commercial manager of Comparabien.com.
The budgeted debt is the one in which you have control of how much is being spent, how much is going to be paid and the cancellation period is defined. There is another type of debt that should be avoided and it is one in which we are not aware of how much we have to pay and how much we are spending.
In the day-to-day that one consumes and consumes, one does not know how much one’s debt will be at the end of the month and when the account statement arrives it grows a lot. That is the debt that generates the greatest problem for the consumer.
In the budgeted debt there is not much problem because we are already aware of what we have to pay month by month, and what we should look for is savings.
But there are problems with the other type of debt, he emphasizes. It may be the case that the person realizes that he spent a lot during the month and will not be able to pay his account, not even the minimum fee. At that time, what you can do is apply for a loan or a debt purchase, always looking for several alternatives and which of these can help you, he recommends. Although buying debt offers lower rates than a personal loan, not everyone can access this alternative.
In buying Debt, there are two situations. One that the bank offers to buy your debt. There the user has to analyze how much he owes with the card and see if it is better to transfer it to a debit purchase to lower the rate.
The other situation occurs when the person, of his own free will, approaches financial institutions and sees if he has the possibility of accessing a debt purchase.
Loan. In case you cannot access the purchase of debt, there is also the option of requesting a personal loan to pay the expensive debt on the card.
The personal loan rate is always lower than that of the credit card, the executive points out.
The idea is to see which banks offer the lowest rate. Look for two or three options and see in which of them the interested party is on the list of pre-approved clients.
Minimum payments are often recommended. If an installment purchase is made, for example. That debt will be divided into three parts, and additional interest will be added.
When the total monthly debt is paid, what you do is pay the full installment: the interest plus the percentage of the purchase made. If the minimum is paid, cancel the interest and a small percentage of that purchase. Therefore, much of that quota is being kicked for later.
Never lose track of how much we are spending. If that notion is lost, it may be that it is not known how much will have to be paid at the end of the month.
Finally, do not get used to paying the minimum amount, try to pay the full installment because otherwise there will come a time when only the interest will be paid but never the principal.
