What does each of the interest charged on the credit card mean?
One of the forms of payments most used by Brazilians is the credit card. Actually its convenience and practicality are convenient, but do you know what each of the interest charged on the credit card means? The amount of interest rates you pay?
It is a right of the customer to request a copy of the contract and the table with the current tariffs and the Total Effective Cost. This covers all fees and charges charged by the card.
We list for you all interest that involves a credit card.
Know the fees and what each of the interest charged on the card means
When you apply for a credit card and start using it, you’ll receive a monthly bill for your bill. Here you will find some fees that you should always be aware of. Are they:
Annuity: is the fee paid for using the card. The annuity is charged once every twelve months;
Emergency credit assessment: is charged when the customer makes expenditures above the available limit of the card;
Payment of bills: fee charged when the customer uses the card to pay invoices and billing bills like water, electricity, taxes etc;
Withdrawal: the fee is charged if the customer makes cash withdrawals through the credit card in service channels in Brazil or abroad;
Second copy of the card: charged for the preparation and issue of a new card, in case of replacement for loss, theft, theft, etc .;
Interest: Charged when the customer does not clear the invoice completely.
+ What are compound interest
When are interest charged?
Now that you already know what each of the interest charged on your credit card means, it is important to know at what point they are charged.
Interest is charged to customers who do not pay the full amount of the credit card bill. Currently, the customer can only pay part of the invoice amount, the so-called minimum amount, and leave the remaining balance for the next month. This operation is called revolving credit and is considered, along with the use of overdraft, the collection of the highest interest in the market. Therefore it should be avoided to the maximum.
Before you wind up with a credit card, learn some tips on how to organize your finances with your card.
Also see when it’s a good idea to shop with your credit card.
How Revolving Credit Works
The person can opt for the minimum payment of the invoice or decide to pay any amount lower than the total balance. Then you will have to pay interest on the remaining balance. This interest is automatically funded and released for the next month’s charge.
Under the new rules, implemented in April 2017, the revolving credit will have a limit of only 30 days. After this period, the customer may pay the balance due in full. Or you can also borrow a loan from the bank, with lower interest, to pay off the debt. Another option is to make a personal loan.
In addition to understanding what each of the interest charged on your credit card means, you now also know when it is applied.
Read more about how to save money.
When is interest charged on late payments?
In cases of late payment of the invoice, the bank or the operator of the card has the right to charge default interest.
According to article 52 of the Consumer Protection Code, the delayed fine can never exceed 1% of the total value. Such interest may be collected even if it is not specified in the membership contract. However, in this case, the collection limit is only 0.5%.
If the customer considers that the fees charged by the card operator are abusive, he should seek Procon for guidance.
Did you know that you can apply for a credit card online? See more.