We know that for many of us it was inevitable to make expenditures in December and January, therefore, the administration of money is more complex. The situation tends to be even more complicated, since at the beginning of the year the prices of products, services and taxes increase, as well as other expenses such as payment of annuity cards, gym, etc.
Therefore, we give you some tips to face the call cost of January, using your credit card. The cards can seem enemies in life, but if you use them intelligently they can be great allies.
1. Know your debt capacity
Before entering the months with or without interest on your credit card (and regardless of the type of credit you use to finance yourself), you must know the amount of money you can pay month after month.
There are two general recommendations.
a) Use a maximum of 50% of the total of your line of credit.
Beware: increasing your line of credit to be able to spend more and stay below 50% is not recommended, unless you can really pay in a timely manner.
So that you do not fail, the following rule is infallible.
b) Your debts must not exceed 20% or 30% of your income.
This way you will not compromise your daily expenses in food, transportation, rent, essential services (water, gas, electricity), tuition, among others. Check here the budget calculator and your debt capacity .
2. Choose the product that suits you
According to Coru , the credit comparison company, 70% of people do not have the appropriate credit instrument for their needs.
If you think you can not pay your monthly payments on time, make sure that the interest rate is low, because otherwise, if you delay a single day with your payments, they will charge you high interest, among other commissions that the bank determines.
If you can pay your cards punctually, the amount of the interest rate will not matter, rather you should focus on additional benefits such as points, so that with these you pay your annuity. You must use your card in everything, but you must be very responsible. Perhaps, the biggest benefit is the months without interest in various establishments, to improve your cash flow.
3. Keep a record of what you have available on your line of credit
Make a list of what you paid for with your card and the months in which you committed to pay, so you will know how much you owe and you will not get too much debt.
If you make small payments and do not have control, your finances can get complicated. For this, you can keep an automatic record with Finerio, which allows you to link your bank accounts in a single app and have better administration.
4. Activate reminders and timely pay
If you delay only one day and your interest rate is high, the payment you will have to make will be very high. So, for anything strange that happens, try to pay at least one day before the payment deadline and during working hours to make any clarification.
Write your payment deadline in your calendar and activate notifications, if you are forgetful like me, put two notifications. I share my experience.
Generally, I make my payments online and in the morning, but one day I forgot to make the transfer. At 18:01 hours of the payment deadline, when I remembered to make the payment, it turned out that at that time in my mobile banking card payments could no longer be made.
I thought, I can pay at the ATM. My surprise was that the branch that I was passing was not in operation, everything was closed, to the ATM area. Then I said, I have an Oxxo, and I went to that establishment, but I found a supermarket before. I said, great, here I can also pay.
I went to the supermarket and asked if the card payment could be made (just in case). The lady told me yes, but that the system was slow and did not know if the payment would pass. Pfff! Well, fortunately, the payment went through and they did not charge me any commission as I would have done in an Oxxo.
I was very happy to achieve the feat of paying on the deadline. When the statement arrived, I had the commission charge about 390 pesos plus VAT, since the payment was reflected three days after the operation. The good thing was that the bank verified that I paid on the indicated date and made the payment refund. But what a great scare I had. I would have paid almost 400 pesos just for not paying on time!
The lesson says: do not wait to pay at the last moment. Even if you pay at the Oxxo and they charge you a commission of 15 pesos, pay on the deadline. Also, you will not waste time looking for where to make the deposit, if your online banking does not work.
5. Never pay less than the minimum
What would happen if you paid less than the minimum amount? Well, if you pay less than the minimum amount, your debt can be multiplied up to six times. If you owe 6 thousand pesos, with an interest rate of 35%, you can end up paying more than 36 thousand pesos and pay for eight years, a lot.
Always try to pay more than the minimum and contact your bank to explain your situation. But never let your debt grow. Banks are also interested in you paying them, because they even lower your interest rate, if it is too high.
6. Get 50 days to pay for your purchases
The advantage of using your credit card is that you can pay up to 50 days after making your purchase. That’s right, if you make a purchase after your cut-off date, you will have about 50 days to save and pay.
A tendency in the United States so that you do not have a giant payment at the end of the month, is to pay weekly. Which is a very good idea, since it takes advantage of the old scheme of small weekly payments, as Elecktra does, but without the mega interests.
So, if you have 50 days to pay, you have 7 weeks to make small deposits.
Or, if you get paid every fortnight, you have the option to deposit every 15 days so that you do not spend all your salary. In 3 weeks you will forget your debts.
7. Pay for months without interest and with discounts!
On the January slope you can save if you pay in advance. If you use a credit card, you can pay 3, 6 or 12 months without interest and get discounts.
For example, in Mexico City, taxpayers who pay their property in advance in 2019, will have a discount of 8 percent in January, while those who do it in February will save 5 percent.
In the same way, in the State of Mexico there will be a discount of 8 percent to those taxpayers who pay in January and one of 6 percent in February and 4 percent in March.
In the case of payment of tenure, there will be a 100 percent subsidy in the Metropolitan Area of Mexico City, so you should only cover the so-called ‘endorsement’ to avoid paying more in the following months.
In Mexico City, the ‘endorsement’ will cost 556.50 pesos.
Meanwhile, in the State of Mexico this cost will be 623 pesos.
9. Avoid compulsive shopping
The payment of taxes is an intelligent debt, because anyway you will pay it and you have a discount. But avoid getting more debt.
Plan, plan, plan! Every movement you make in January is very important. Search offers in your daily expenses. Do not make unnecessary expenses. Avoid spending on coffee in the street or cafeteria, sweets, cigars, soft drinks, eating out, taxis, commissions, etc. According to the Condusef, ant spending represents up to 12 percent of the monthly salary.
A credit card will help you to pay little by little on all the bigger expenses, which you have to do in any way. The key is to know your monthly debt limit, plan, record your purchases and pay your debts on time.