It’s inevitable. We always refer to the credit card as the great villain of Brazilian debt. But this is no wonder! Brazil is considered to be the country with the highest credit card interest ratio in the world.

Note: 76.7% of debts are credit card causing. Really its convenience and practicality make it a very convenient tool in our daily lives. Credit card has emerged as a facilitator for people. It allows installment purchases and increases the purchasing power of the population. But how then do you turn your credit card into your ally? Here are some tips that can help you improve your relationship with the darling of Brazilians and even make your money pay more. Check-out!

Credit card as ally

1. Credit card is not income supplement

The first step in learning to use a credit card as an ally is to understand that it is a form of payment, not an extra in your monthly income.

This means that your limit is not a second salary, but the possibility of paying in installments, planning the payment of purchases for the coming months and spending your money more safely.

2. Use for your financial organization

For those who use credit card with being able to collect payment for all purchases and expenses on a single date is a hand in hand. You can rely on your credit card to increase your control over your expenses. That’s because the card brings you a detailed monthly bill of everything you’ve spent, helping you know exactly where your money is going.

The card limit can also serve as an effective form of control, preventing you from spending more than you need – just reducing purchases in debit and cash so you don’t run out of money to pay the bill in the end. In addition, with today’s technology, you can see your daily expenses even from your smartphone. That way you will always know how much you can still spend and if there is room to install any purchase without compromising your limit in the coming months.

3. Join the Points System

Most credit cards offer several benefits to the customer who uses it. The best known of these is the point system. For every dollar paid on the invoice, you earn a corresponding amount in points. These points can be redeemed on products, travel miles, movie discounts, etc. There are people who are aiming for a trip and buy and pay their credit card bills to collect mileage. This requires extra organization.

Set up a spreadsheet with every purchase you make on your credit card and you need to commit to taking the purchase amount from your checking account and putting it into savings. Bottom line: It’s as if you were buying on debit, but the bill will only be paid when the invoice comes. You are just changing the payment date. This organization is important so that you don’t get lost in spending and wind up your financial life.

4. Have goals and objectives

It’s a big risk to have a great ally and not have clear goals about how much you want to spend or what goals you want to achieve by using it.

These two points are also key because they help drive card usage. And they are also good topics for families to have a good conversation about finance.

5. Quit your invoice on time

By controlling your spending through card launches, you already significantly reduce the chances of extrapolating your budget by the end of the month, but even if it does, there’s still a solution.

In such cases, you can contact the issuer card to report the situation and negotiate the debt, and may even fund it. During this time, try to define which expenses are a priority and try to cut superfluous expenses until you can resolve the issue. After that, just keep an eye on your bill and pay it on time, maintaining a healthy and peaceful financial life!

Card payment rule

Card payment

In March 2017, the government announced new rules for rotary use in an attempt to reduce card interest. With the change, it can only be used until the next invoice expires. That is, the consumer can only make the minimum payment of 15% of the card for one month.

On the next bill, the bank can no longer run the debt: the customer pays the full amount or needs to repay the debt on another credit line, with the cheaper interest.

But it’s not good yet. In November 2017, the revolving interest of the card reached 333% per year. The cheapest installment interest quoted above reached 186% per year.

Credit Card Annuity

Credit Card

Credit card annuity is an annual fee that the credit company charges so that you can have the “right” to use their card. Before signing with a company, pay attention to the value of this fee. Most of the time you can trade and lower this value.

However, there are already credit cards companies like Best Bank or Digio or banks with free card arrangements. Social Bank or Mabolo Free do not charge annuity, but they do not usually offer the system of points accumulation. It is therefore very important to put what is worth in the balance. See if you earn more from scoring system exchanges than you pay annually to use your credit card.

At Best Bank, for example, if you have $ 1,500 in a monthly bill, it would be worthwhile to migrate to the paid mode, Rewards, with annuity and points accrual. As you can see, the credit card is no seven-headed animal and can be your great ally when it comes to organizing your financial life. Just know how to use with intelligence and planning.