New rule allows customers to take their debts with their card’s revolving credit to another institution, without paying for it
Credit card holders can, from this Monday (Jul 1st, 2024), transfer the outstanding balance of the invoice to a financial institution that offers better renegotiation conditions. A resolution 5,057/2022of CMN (National Monetary Council), was created to reduce debt.
The new rule was approved in December 2023. It is the same one that limited interest on credit card revolving debt to 100% of the debt. It also requires transparency in the format of card statements.
WHAT CHANGES
Read the main points of the new rule:
- the financial institution’s proposal must be carried out through a consolidated credit operation, that is, one that covers all the debt accumulated on the card;
- if the original creditor institution makes a counter-offer to the debtor, the credit operation must have the same term as the refinancing of the proposing institution, for comparison purposes;
- portability will have to be done free of charge.
TRANSPARENCY IN INVOICE
From July 1st, to improve transparency, invoices must include essential information about the card debt – such as debt amount, due date and credit limit – in a prominent area.
Payment slips must also have a section offering payment options. In this area, only the following information should be specified:
- amount of mandatory minimum payment;
- amount of charges to be charged in the following period, in the case of minimum payment;
- financing options for the outstanding balance of the invoice, presented in order from lowest to highest total amount to be paid;
- effective monthly and annual interest rates; It is
- CET (total effective cost) of credit operations.
The CMN also ordered financial institutions to send the invoice due date to the cardholder. The information must be sent at least 2 days in advance, by email or message on a customer service channel.
Another part of the invoice must contain additional information, such as:
- postings to the payment account;
- identification of contracted credit operations;
- interest and charges charged in the current period;
- total value of interest and financial charges charged on contracted credit operations;
- identification of the fees charged;
- individual limits for each type of operation, among other data.
HOW TO DO PORTABILITY
Read the step-by-step guide to transferring your credit card revolving debt:
- Consumers interested in renegotiating their card balance should consult the issuing institution for general information about the debt, such as the outstanding balance, installments due and interest rates;
- With this information in hand, you should look for your preferred company to renegotiate the debt;
- the institution that issued the credit card will have up to 5 days to make a counteroffer;
- once the credit is approved, it will be transferred directly by the financial institution that carried out the renegotiation to the institution where the consumer has the debt, and cannot be used for any other purpose;
- in the portability of debts of individuals, the value and term of the new transaction cannot be greater than the outstanding balance and term of the original transaction;
- If the customer cancels the portability, they must inform the company where the original debt is located and the company will be responsible for communicating the institution that made the renegotiation proposal.
The CMN resolution also determines that financial institutions must disclose to their customers the information necessary to request portability. The procedure must be in a location and format visible to the public.
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