Interest

Learn how to get away from high credit card interest

05/13/2016

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Experts teach you how to avoid the trap of rotating, that debt rate at 435%

THE DAY

Rio - The surge in market interest rates, which hit 435% in April to the revolving credit card, is the main reason for the huge indebtedness of Brazilian households. So one of the main expectations of the measures of interim president Michel Temer to revive the economy is if your government will lower the benchmark interest rate, the Selic, which is 14.25% from last year.

Not to fall into the trap of high interest rates, experts give tips for the wise use of credit card. And if you fall, how to get rid of it.

Secure the card limit at 50% of salary and not pay minimum portion of the bill are two tips to avoid debt

Photo: Marcela Beltran / Agency Day

Fix the limit credit card at 50% of salary, not paying minimum portion of the bill and not lend others to card are the most recommended precautions. "The card is a safe tool purchase, which can have advantages, if used well as mileage and a few days to pay for a purchase. However, if misused, can cause serious damage to financial health, becoming a vicious circle, "guides Reinaldo Domingos, president of the Brazilian Association of Financial Educators (Abefin).

For the lawyer José Ricardo Ramalho, consumers should try to save money and pay for goods and services in view not to fall into the trap of high interest rates. "The card should be used as an ally of personal finance, so always keep notes of spending limit, the inputs and outputs of the current account," he says. He adds: "Organization is the key to the economy."

Buy to pay later is tempting, but paying the minimum card invoice can compromise the finances. "It became a snowball," laments Pillar de Sa Freire Taveira, 25, resident of Meier.

The microempreendedora took a promotion and pay the card in February. But the next month, with little cash on hand chose to pay the minimum invoice. Now in May, when the bill arrived much higher, she thinks it will not pay. "I'll look for the credit card company and negotiate the debt," says Pillar.

Check out the top ten tips

1 - The card limit should not exceed 50% of salary or monthly income, which will avoid spending more than it receives.

2 - The ease of installment on the card contributes to higher debt. By making fixed payments, one must be aware that is affecting the monthly budget for future months.

3 - The biggest mistake in relation to the card is to pay the minimum installment. The high interest rates lead to default. If you can not pay the full amount, look for another line of credit to no more than 2.5% per month.

4 - Avoid card annuity payment. You can find cards that do not charge any maintenance fee. Also never lend your card to someone else, even known.

5 - If you have only one monthly gain, keep only one credit card. If you win every week, you can have up to three cards, due to the days 10, 20 and 30. With this, you can buy six days before the expiration of each, earning 36 days of payment.

6 - a polite way, financially, to use the card is to know enjoy the benefits, such as awards or mileage.

7 - If you can not pay the full bill card at maturity, you need to make financial diagnosis and find the problem. Along with this, you should get a line of credit with low interest rates.

8 - It is important to be aware that the parcel on the credit card, will pay interest on each installment.

9 - Do not lend to a person who does not know to pay in interest-free installments? No. So, save money, buy the view and ask discounts.

10 - The card used without conscience allows impulse purchases. So, beware. It takes responsibility for time consuming.

Source: The Day

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