You know that the new credit card rules have already taken effect, right? From now on, users must split the debts on the card after 30 days. However, if you are still unsure about what has changed in practice, this text is for you!
In it, you will find the main points about the change in the use of revolving credit and will understand how to avoid losses. Keep reading and learn all about it!
What are the new credit card rules 2017?
You may have noticed that your card statement comes with two amounts:
- the total, with everything you spent;
- the minimum, which is 15% of the total.
Until the beginning of this year, you could pay the minimum whenever you wanted. The difference then passed to the next invoice, plus interest – this is called the revolving credit.
This, however, is over. New rules were defined by the National Monetary Council (CMN) of the Cream Bank last January and began to take effect on April 3. They were created to combat default and lower interest rates. The main change is that there is now a one-month limit on revolving credit.
In practice, it works like this: imagine that your invoice came in the amount of $ 1,000 and you paid the minimum, $ 150. On the $ 850 – the difference between the total and the minimum – $ 102 of interest was added (we are using as an example a rate of 12%, On the next invoice, you will not be able to pay the minimum on these $ 952. The only two options for this amount will be to pay the total or to split the invoice.still quite common in this type of operation).
How to avoid losses with card debt?
In the old rules, many people were at risk of falling into the “snowball” effect: the person always paid the minimum, and the high interest rates made the debt impossible to pay. With the new rules and lower interest rates on installment loans, the idea is to have a smaller and more accessible debt.
However, attention is needed: installment interest is lower than that of revolving credit, but it is still very high. In addition, uncontrolled expenses, added to the installments of previous invoices, can compromise your budget.
Here are some tips to avoid losses!
Pay the full amount whenever possible
The best way to avoid debt remains the same as always: pay the full amount whenever possible. To do this, try to control your expenses and prefer the payment in cash, with cash or debit card. An application can help you organize your expenses.
Pay off the debt the following month
If it was not possible to pay the full amount, avoid new credit card expenses and try to pay off the debt the following month.
Despite the high rate of turnover, in short periods the total value tends to be less than the sum of the installment installments. So, you don’t lose that much money.
See if a loan is not cheaper than installment payments
If, even though you are controlling expenses, you do not have the money to pay the total invoice in the following month, take your time. Your card administrator will offer an installment payment on your invoice. Before accepting it, check the rates and terms for taking out a personal loan and paying off the debt.
Today, it is possible to find companies that offer credit at lower interest rates and do the entire process over the internet, without having to leave home, in a practical and quick way. Now you know how the new credit card rules 2017 work! Do you always want to stay on top of financial matters?