Interest on credit cards can reach 30-60% per year, and five rules must be followed to ensure that the borrower does not have an unpayable debt. The first of these is to carefully read the contract with the bank. Aleksey Rodin, financial consultant and expert on the “Moifinance.rf” portal of the Research Institute of the Ministry of Finance of the Russian Federation, told socialbites.ca.
“Credit card is also a type of loan. It is in the contract that all terms, conditions and penalties are explained. There can be many pitfalls in a contract that can disappoint a customer who trusts advertising. “The main rule is to always read the small print,” he said.
The second rule is to make regular payments.
“Many people often forget to make the minimum payment, so the bank imposes large fines. You need to remember how many days the interest-free period will last and set yourself a reminder on your phone the day before it ends. If a person manages to pay off the entire debt within the “payment period,” the bank will not charge any interest,” Rodin said.
According to him, if it is not possible to pay the entire debt, at least the mandatory payment must be made before the “payment period” expires. This will help avoid penalties.
The third rule is not to use more than 30% of the credit.
“If a person spends more than 30% of their available credit card limit, they will be included in the bank’s list of “ineligible customers.” Therefore, you may be rejected for a larger loan or a new credit card in the future,” said the expert.
The fourth rule is to use a credit card only when necessary and not to buy anything you can do without. According to Rodin, the card should not be used for daily shopping.
The fifth rule is to negotiate with the bank.
“If a situation arises in which the grace period has expired and the person does not have money even for the minimum payment, you need to contact the bank’s support and explain everything. In most cases, banks are interested in the borrower repaying his loan. Rodin said we need to reach an agreement on a loan holiday or restructuring.
From now on, you should focus all your energy on paying off your debt: Start saving, find a part-time job or, as a last resort, borrow from friends, he added.
Previously “socialbites.ca” saidIn 2024, almost 70 percent of Russians will save.
Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.