The incorrect use of credit cards is a very common practice among active account holders of commercial banks. Proof of this is that 8 out of 10 people who went to Good Finance during 2017, did not know the correct way to calculate the interests of their bank cards and that was the reason that led them to add debts of 140 thousand USD on average, another One thing in common among them is that “they found it easy to pay one card with another.”
All of us, who have a credit product, have the right (and obligation) to learn how to pay by credit card and ask one or a thousand times all the questions that arise.
It is very important to verify what the Total Annual Cost (CAT) is , what amount the financial entity asks for due to annuity, what is the charge for non-payment, for physical replacement, and one of the most important: what is the commission that Applies when making cash withdrawals.
Depending on the credit card you have, it will be the charge you will have to pay to the bank. In some cases, the interest rate for cash disposition is the same as that of your purchases, additional to a commission per event , that is, per withdrawal transaction; However, in most cases the application varies according to the product you handle.
So considering that, according to an analysis, most credit institutions apply a commission of 10% on the amount of cash you request, not only will the daily interest rate be applied, but also the commission for the provision.
Don’t you think about paying one card with another …
When you have two or more debts on different cards, it may seem the solution to those times when for some reason we do not have the possibility to settle any charge; However, doing so could bring many more problems than solutions, don’t you think?
I insist, if this comes to mind, it is because you are already presenting problems to cover your monthly payments, you are not solving your problem. Debts can easily get out of control and become a snowball that permanently affects your economy.
So, when someone asks you if you should pay one card with another, the answer to this question is very short and clear: NO.
There are other options
The first thing you should do is recognize what your situation is, because there are two scenarios:
A) You are late in your payment obligations with a bank and you can definitely not pay anymore
If this is your case, the best option is to approach a credit repair company like Good Finance. What it will do is get you a discount of up to 70% on the total debt. In addition, it will provide you with legal and financial advice so that, through a savings account, you acquire good financial habits and avoid falling back into indebtedness.
B) You are behind on your debts, your income does allow you to continue paying the bank, but you want to get better payment terms
If this is your case, there are two alternatives:
- Balance transfer: That is, pass the debts of all your cards (no matter if they are from different banks), to one that has a lower interest rate. The advantage is that it will be easier and especially cheap to pay your debts and you will have more control of them. The disadvantage is that not everyone can request a card to transfer their balance and get better payment terms, the line of credit they provide is usually assigned by the financial institution and can depend on each client.
- Debt consolidation through a loan: There are very attractive alternatives in Fintech marking. For example, Cream Bank, which offers you credits from 20 thousand to 350 thousand USD and handles personalized rates that can range from 9.9% to 28.9%, the only requirement (in addition to official documents such as identification, proof of address and income) is Have a good credit history.
But whatever credit you choose … here we list everything you need to pay attention to:
- Compare the interest rate currently applied by the bank and opt for the credit that manages a lower CAT than the one you are paying.
- Research the bank or company you plan to choose.
- Ask all the questions that arise, as some institutions condition the obtaining of credit with the purchase of insurance. (This is intended to protect themselves, find out how expensive it is).
- As it is a non-revolving loan, it will be easier to use it for a particular purpose, such as the payment of debts, since it will not be reused once it has been settled. (Remember that revolving credit is a type of credit that can be used repeatedly and does not have a set number of installments).
Now you know! There are alternatives for everyone, share this post to those who need it most. Start managing yourself and avoid reaching a level of overindebtedness that you cannot control.