Interest on credit cards was created by financial institutions to help people pay bills.
This form of payment is known as revolving credit. Financial institutions created it to help customers cover the entire bill. In other words, it is as if the bank lends “more money” to the customer to cover their debts. However, experts in the field point out that it is necessary to be very cautious with this form of payment, since it can increase debts and compromise finances.
Most people take advantage of this solution by spending without control. But, when they receive the bill, they are frightened by the large amount they have to pay.
Tips for using credit cards
Do not make hasty decisions
One of the most common mistakes is to pay only half of the debt, since interest is added and the debt increases. Therefore, it is important to verify the amount of the invoice so that it is in line with the salary.
Income is not the limit
Most people believe that credit is an extension of their salary. As a result, they spend non-stop. It is recommended that a maximum of 30% of the income be allocated to the card; thus, if it is exceeded, the budget will be able to cover the expenses.
Be careful with the variety of cards
It is possible to have more than one option, however, it is necessary to be prudent. Each offers benefits, but does not mean making more money. Rather, the more cards that are used randomly, the more the bills increase.
Establish limits to avoid high interest rates
Usually, institutions set a limit that is above what they have and this is misleading. Spending must be within the monthly salary budget; therefore, it is necessary to establish a limit.
Knowing how to choose the best option
Knowing how to choose the most appropriate card avoids future debts. It is important to analyze the interest rate charged, i.e., penalties, annuities, fees, etc., and which card offers the most benefits and rewards.
Finally, the Universidad Internacional Iberoamericana (International Iberoamerican University) (UNIB) offers the Master in Strategic Management with a Specialty in Management.
