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Debts

It has debts? Here's what to pay first

29/05/2012

This article was translated by an automatic translation system, and was therefore not reviewed by people.

 

 


 


To avoid a snowball, experts recommend settling accounts with higher interest rates, such as credit card, and essential services like water and electricity
 
Reorganize the finances is no easy task. Especially when the debt is already so out of it is tricky to know where to begin to tackle the problem. Instead of paying the smaller bills, experts recommend repay those on which incur higher interest rates, such as credit card and overdraft. But you also need to catch up on debts for essential services like water and electricity.

"You have to merge their debts more financially penalizing those that generate penalties," said Miguel Ribeiro de Oliveira, director of economic studies of the National Association of Executives in Finance, Administration and Accounting (Anefac). In practice, this means you have to sit and do math, but without leaving aside those debts which penalize the consumer on a daily basis. "If I stop paying the electric power house, cut the light. If not paid the school, children are no enrollment next school year, "he says.

This tip also applies to condo in arrears and licensing of the vehicle, which can give pain to those heads if the car is impounded or fined for not being regulated. Failure to pay the financing of the vehicle is not a good idea, because the financial can repossess the car in a few months.

By prioritizing the bills, do not forget those with higher interest rates. "Firstly, we must pay what is more expensive, according to the interest rate. The higher interest rates in the market are the credit card. So do not delay the bill, "said Keyler Carvalho Rocha, president of the Board of Directors of the Brazilian Institute of Finance Executives of São Paulo (SP-Ibef). In the case of overdraft, the average interest rates can reach 159.76% per year, while credit cards can go from 238% annually, according to data from Anefac.

Debt cheaper

Rocha also warns into the trap of minimum payment of the invoice, which can double the amount. "If necessary, negotiate to pay lower rates on. Or you can take advantage of a loan to pay off the card or to cover the overdraft, then why should you get lower rates the financial, "says the economist. And do not be tempted to use the money to pay off debts with lower interest rates, such as electronics and consumer goods with low added value, the rate is around 74% per year, according to Anefac. "If you get the credit, pay the debt more expensive," suggests Rocha.

The greater availability of credit at lower interest rates might even lend a hand in that direction. "Through the portability of credit, you can negotiate the debt with a bank. You replace the more expensive debt for cheaper, "says Professor Jose Nicolau Pompeo, PUC-SP. On average, the interest on personal loans from banks are 54% per year, while the financial can reach 155.76%.

Keep an eye also on the fines imposed on the delay of certain accounts. "It's good to remember that next month will need to pay the amount plus a percentage that can reach 20% or more. He will end up paying a lot, "says the chairman of the Board of Ibef-SP.

Moreover, there is some delay accounts which penalizes least the consumer's point of view of the pocket. This is the case of debt in retail stores with electronics, appliances and furniture, whose rate varies by retailer. The worst penalty in this case is the inclusion in the name SPC. "Whenever you can piecemeal without interest, enjoy. It is a way to stretch out the debt, "says Rocha.

Tips

First pay the bills for essential services (water, electricity) and the accounts that have higher interest rates (credit card).
Then, quite the debts that can bring headaches, such as condo in delay and vehicle licensing.
Pay attention to accounts that have high fines. In some cases, the penalty for the delay is 20% of the debt
Try to avoid paying just the minimum credit card
Consider the possibility of renegotiating debts and borrow cheaply to settle accounts with high interest
To rearrange

The definition of debt involves costs that exceed the personal income or family. Therefore, to reduce costs in areas such as leisure and food, says Professor Edno Oliveira dos Santos, director of the Institute of Financial Studies (IEF). "The first recommendation is to make a budget that considers all income and expenditure for twelve months ahead, including the financial costs that already exist," indicates.

"We must consider that every time you make a debt - with the exception of mortgages, according to Santos - is getting poorer because of high interest to pay," he says.
A good way to increase income is to sell ten vacation days and use the money to pay debts.



Source: Ig News

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