Want to know how credit card installments work? See below.
Nowadays, credit card companies offer the option of paying your bill in installments. When the end of the month comes and you realize that you won't be able to pay your bill in full, you have the option of paying in installments.
However, this is not the most advisable option, since when you pay your bills in installments, interest is charged on top of the amount owed.
Here's how credit card installment payments work and the main reasons not to do them.
How credit card installments work
Compared to making the minimum bill payment, installment payments are more appropriate, since the interest charged when you pay a bill in installments is lower than when you make the minimum payment. This is one of the ways you can negotiate with your bank to pay off your debt.
Depending on the financial institution, you can pay your bill in installments within 24 hours. However, it is advisable not to delay payment. Avoid problems such as having your name in the SPC or Serasa.
In practice, you will continue to pay your bill as normal with the addition of the installment payment for the current bill.
An example of this is if you need to pay your January bill in 4 installments. You will have to continue paying other invoices plus the addition of these installments in February, March, April and May.
To pay your bill in installments, all you have to do is log in to your mobile application. credit card and search for invoices, invoice installments. If you can't, contact the online chat.
6 reasons to pay your credit card before the due date
After understanding how credit card bill installments work, now see why you should pay in advance.
1. Paying off your credit card early frees up your credit line
Try to keep the total of all your card balances at 50% or less of your total limits. This helps increase what is known as your capacity and reflects positively on your credit score.
The ideal point for the card balance is around 30% of the spending limit, but this is a long-term goal and it can take some time to get there.
If you make a large purchase, don't wait until it shows up on your account. You can start paying for these expenses immediately by freeing up your credit line on the card.
2. Paying in advance can improve your credit score
The fact is that your credit score is used in many parts of your daily life. Paying bills on time helps your credit score by 35%. Why put that at risk by waiting until the due date to make the payment?
3. Paying off your credit card in advance will help you control your spending
Credit cards can offer some great benefits. But when you start carrying large balances, you can run into problems.
If you get paid every two weeks or if you have a spouse with an alternate payday, you can coordinate your credit card payments to match.
By paying credit card charges when they arrive, you become more aware of how much you're spending and find a balanced budget. (You've worked on that budget, right? If not, create a budget.)
4. Paying off your credit card early reduces the interest charged
If you don't pay off a credit card in full, the following month you will be charged interest every day, based on your daily balance. This means that if you pay part (or all) of your bill early, you will have a lower average daily balance and lower interest payments.
It goes without saying, but check your credit card rates. Credit operators are known for their excellent rates, which means you have more of your money in your pocket.
5. Paying off your credit card early means paying off your debt more quickly
This is useful in several ways. Firstly, if you're paying off your balance early, this reduces the amount of interest you'll be charged, lowering your total outgoings. Secondly, your money will pay your bills instead of increasing them.
6. Paying in advance means you're less likely to forget about it
Unless you pay a bill immediately upon receiving it, you are defying fate. Why risk getting lost in the shuffle or being late by waiting until the last minute? Pay in advance and avoid unexpected interest.
