Mistakes are often made when starting to use credit cards, the most critical of which is to ignore the very nature of the cards and the financial cost involved in their use. Almost immediately, the monthly payment commitment is defaulted and falls into the vicious circle of making only the minimum payments, with which the debt tends to perpetuate itself.
It is necessary to comment here on some questions about the debts that are contracted when acquiring credit cards and warn about the commitment to make payments on a regular basis.
You need to use credit cards properly and carefully. Photo: Pixabay.
Avoid considering the card as an extension of your salary, of course you should not take it as a free way to obtain resources. It is actually a financial product that you must pay to use. If you stop making payments, it can cause problems.
What is the ordinary interest?
When you pay with your card, the issuing financial institution charges you ordinary interest. The Condusef defines these costs as the normal payment for the regular use of the card. Partial payment must be made if the total debt is not covered.
What are the default interest?
When you fall behind in the commitments you have established each month, a situation occurs known as delinquent interest and it is the amount that the financial institution charges when you have fallen behind in payments.
By not making the minimum payment to continue using the credit line authorized by the bank, it is necessary to pay the ordinary and late interest whose conditions you authorized.
If you do not cover your card payments month by month, it can become an easy problem to solve if the delay is one or two months, but over time the situation becomes quite complicated.
What to do when default interest increases?
The most important thing is that you commit to paying your debts. You must take into account that what you allocate to that payment should not go beyond 30% of what you earn. Avoid defaulting or delaying the payment of the monthly payments. It is also convenient that you try to cover more than the minimum and if possible, pay in a single payment the total amount you owe.
Avoid accumulating payments, if you have problems do not commit your money. One option you have is to ask a credit repair company for guidance, to know what steps to follow and get rid of your debts soon. They can give you advice, putting together a plan according to your needs.
More information in our Credits Section.