Business

Credit card: why now should you pay the minimum

The number of bank customers with lower purchasing power who cannot pay the full amount of the card grew from 30 to 40% and they end up paying the minimum. This is what in financial jargon is called revolving‘.

Since the rate is regulated by the Central Bank (BCRA), entities cannot charge more than 43% annual nominal rate, which happens to be a more than tempting rate, being below inflation.

It is even much more convenient than taking a personal loan, whose rate is almost double that of the revolving, being 78% per year, and end in a total financial cost of 148%, which varies according to the bank and the client in question.

“Until before this rule, the card was the worst resource that a person could have to take out credit, the most practical thing was to take out a credit in the same bank to cancel the card, which was 25% cheaper, “says financial advisor Javier Ferrer.

As the rate is regulated by the Central Bank, entities cannot charge more than 43% of the annual nominal rate, which is a more than tempting rate, as it is below inflation.

The cheapest

“Due to the regulation of the rate by the BCRA, the revolving ends up being one of the cheapest means of financing, falling short of a personal loan and not to mention a checking account, “warns analyst Christian Buteler.

The problem is that banks do not increase the financing limits for those customers who usually pay the minimum, so in many businesses the card bounces when they want to make a purchase, as they have no more credit capacity.

The problem is that banks do not increase the financing limits for those customers who usually pay the minimum, so in many businesses the card bounces when they want to make a purchase, as they have no more credit capacity.

To make ends meet

Damin Di Pace, director of Focus Market, observes that in the third and fourth quarters of the year the population of the lowest socioeconomic level grew that must call on your card credit to sustain current spending.

“Despite the government’s attempt to recover the purchasing power of wages via social plans and to inject more pesos into the market, it is being unbalanced by the evolution of inflation, with prices that go up a lot in the basic basket, such as food and beverages, “he details.

Girl letter

The BCRA rule establishes that financial entities must apply the 43% rate to credit card balances up to $ 200,000 for each card issued.

For balances to be financed from $ 200,000, a differential rate may be applied up to the maximum allowed by the Credit Cards law, established in a 25% more than the rate they receive for personal loans, and similar to those applied by non-bank cards.

For balances to be financed from $ 200,000, a differential rate may be applied up to the maximum allowed by the Credit Cards law, established in a 25% more than the rate they receive for personal loans, and similar to those applied by non-bank cards.

Statistics

According to the statistics of the financial system, the 95.5% of credit cards register financing for an amount less than the limit established, so they will continue under the maximum rate regime of 43%.

4.5% of the cards issued register balances above the ceiling of $ 200,000 and only on additional balances banks may apply the differential rate.

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HELEN HERNANDEZ

Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Helen@oicanadian.com Phone : +1 281-333-2229

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