Finally, as expected The Central Bank raised the interest rate which will be applied from January Refinance credit card debt. Inflation, the daily increase in prices and the fact that silver is not enough and must be exploited, plastic plays an important role.
With Communication “B” 12691/2023, published in the Official Journal, the Monetary Authority announced that the percentage that will be applied to those customers who do not respect the total payment of the monthly summary will rise to 140.86% of the monthly average weighted by amount and measured as a nominal annual percentage.
This fee will apply to those who fail to make the required minimum monthly payment and any amount not paid by the due date.
Since the publication of the Decree of Necessity and Urgency drawn up by Javier Milei’s government, this was a point destined to undergo changes.
One of the most common mistakes is paying the minimum monthly bill. That exercise which is always inadvisable will be so again from now on more expensive and will make the debt difficult to overcome.
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.
Regarding failure to pay the required minimum, It is also worth remembering that the credit card is locked.
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 Furthermore, sanctions for companies that do not report the interest rate are repealed.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 amount 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
