Credit cards. Knowing the difference between the court date and the payment deadline is key to having good control of personal finances.
Having access to credit cards implies keeping a good control of monthly payments, especially to avoid falling into debts greater than our income.
Daniella Raffo, COO of RappiBank, provides us with useful data to understand the different concepts related to credit card payments and thus avoid incurring expenses not included in the budget.
READ: Six techniques to save a little money each month
1. Know your court date and your payment date
The balance on the cut-off date of your credit card is the total amount that you must pay to the bank for purchases made with your credit card up to that day. This balance includes the pending debt from previous months, purchases made since the last cut-off date, interest and commissions, if applicable.
You can view it days before your designated payment date, in your Account Statement. An advice? Pay this amount before your payment date arrives and you will be able to save yourself the payment of interest that your bank charges you month after month.
2. Avoid using the credit card as a method to dispose of cash
Although many cards allow you to have an amount of your line of credit to withdraw cash as a loan, this may not be the best option.
Each disposition of this money that you make will generate additional commissions and interests, increasing the monthly amount that you must pay.
3. Apply the 30% rule
Known and recommended by many personal finance experts, this rule indicates that you should not spend more than 30% of your salary on your credit card. That is, if you earn a salary of 1,000 soles, your maximum to consume from your card is 300 soles.
Specialists from the Association of Banks of Peru (ASBANC) indicate that exceeding this amount may be the first warning sign to know if you are having excessive expenses.
READ: Prepaid cards: security tips to avoid being scammed and losing money
READ: How much should you save according to your age?
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