Credit card holders who cannot repay their debts during the interest-free period or immediately after the interest accrues can be recommended to replenish the card regularly in small amounts. The smaller the debt, the smaller the amount of the mandatory payment. This and other advice about credit cards was given to readers of Izvestia on Friday, September 16, by independent financial consultant Anna Krasnopolskaya, Candidate of Economic Sciences.
The prevalence of credit cards in Russia is due to the fact that they are issued by banks easier and more readily than consumer loans, she noted. This is due to high interest rates for using funds from cards, as well as various agreements with partner stores. Unlike a consumer loan, you can pay off your card debt during the interest-free period, when no commission is charged for the use of funds. Typically, this period is from 50 to 150 days. If you pay off the debt in full on time, no interest will accrue.
So that the repayment of debt on a credit card does not stretch for many years, it is best to replenish the card with the amount of the obligatory payment, throwing a little more money, notes Krasnopolskaya.
“So you can relatively quickly reach a smaller mandatory payment, and then pay off the entire debt,” the economist explained.
It is possible, according to her, to replenish a credit card in a double amount – to pay both a mandatory payment and the second same amount. If the mandatory payment will be used to pay off interest, then the second amount will be used to pay off the main part of the debt. Accordingly, the balance of the card will increase and it will turn out to pay off the debt twice as fast.
There is another solution – to refinance with a consumer loan and pay off the debt on a credit card, the financial consultant added. As a rule, consumer loans have a lower interest rate, which may ease the financial burden.
In March, the press service of the Bank of Russia explained the parameters for introducing credit holidays. They noted that 65% of borrowers of consumer loans correspond to the limits on the loan amount established by the government of the Russian Federation. Credit holiday limits for consumer loans are set at 300,000 rubles for citizens, 350,000 for individual entrepreneurs, and 100,000 rubles for credit cards.
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