Prices rising almost every day, inflation expected to be around 30% for December and all the windows opening around this very urgent context for ordinary people. Among all the worries that afflict us on a daily basispaying by credit card is one of them. What happens if I pay the minimum, how much do the banks cost for this unpaid consumption, what is the situation from January 2024.
After the publication of the decree of necessity and urgency drawn up by the government of Javier Milei, the The credit card law has undergone some changes which leave the defaulting consumer in a more complex situation.
One of the most common mistakes is paying the minimum monthly bill. This exercise, always inadvisable, will from now on be even more expensive and will make it difficult to overcome the debt.
What is the minimum credit card payment? According to the banking definition, “is the minimum amount requested by your bank to keep the credit on your credit card updated, without reporting you in default.
How is this minimum necessary so that the plastic does not remain suspended? This figure is mainly composed of: interest, taxes and fees and is generally 10% of the total debt. In this sense, the problem is that, if this system is used over time, it could take years to repay the debt.
In reference to credit cards, the Milei mega-decree eliminates various limits: one of these is the rate applied to businesses (3% in the case of credit cards and 1.5% in the case of debit cards), and punitive interest that may be charged to customers for non-payment. Furthermore, sanctions for companies that do not report the interest rate are repealed.
Until now, these interests represented a rate of 122% per annum (i.e. 11% monthly); after release it would become much more expensive and for some experts it could mean up to 400% per year.
Although it is not advisable to sustain it over time, by opting for the minimum payment the user “stays updated” and prevents the plastic from being deactivated. Furthermore, as banking institutions explain on their websites, “This payment does not affect your credit status.”
Card statement payment method
Full payment: the total sum of that month’s summary is paid (all installments including any interest, plus bank administrative fees).
Partial payment: This is a payment that goes above the minimum but does not reach that month’s summary total. That outstanding balance will generate interest. The calculation is subject to the outstanding amount and delay in cancellation.
Minimum payment: Another option is to make a minimum payment, the amount determined by each card based on the month’s consumption and which must be made to avoid legal problems. If the minimum is not paid after a considerable period of time, the plastic freezes.
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Source: Clarin
