The interest rate makes it more expensive to use your credit cards

During the first semester of 2022 interest rates on classic credit cards have increased, according to data from the Bank of Mexico, rose from 37.28% at the end of 2021 to 38.08% last June. With this increase in the cost of using bank plastic, if you use it as the main method of payment, but when paying monthly installments cover only the minimum payment or a little more without reaching the amount so that it does not generate interest, then it will grow.

When you don’t settle the total amount you spend each month, as indicated on your bank statement or at least payment does not generate interestthey can accumulate these costs and affect your personal finances with debt which grows by carelessness.

AND an important fact you should know about your credit card is the total annual cost (CAT) which is an indicator that consists of all the fees that the bank charges you for using bank plastic, since it adds up all the costs from the interest rate of that financial product to the fees and commissions that are included.

From last December to the end of the first half of 2022, the CAT increased from 51.4% to 54.28%, so the fees and surcharges to pay only the minimum will be higher, and if you let the bill continue, you can see the debt increase at a higher rate.

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If you use a bank card from the category gold credit cardswhich usually include a larger credit line and some additional benefits in addition to the basic ones, you should know that the interest on these plastics increased from 37% to 38.62% in the same period.

In these cases, the CAT indicator has also increased, since the financing with them will be higher when you go from 51.39% to 54.72%, and increases can still be registered because some presentations have a variable interest rate, supported by a reference interest rate from Bank of Mexico, which is currently at 9.25% and could see further increases.

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If your credit card is of this type, it is not the end for your personal finances because it is enough that you are in order so that it does not affect you negatively and you do not have to pay more to the bank for your loans. Check the specifications of your plastic and try to pay the total monthly usage or at least the amount so you don’t accrue interest, but don’t believe the minimum payments and avoid them whenever you can.

For more information on this and other topics, visit the My Pocket Loans section.

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Graduated from the Faculty of International Studies and Public Policy of the Autonomous University of Sinaloa. Observer of the sky and nature; lover of music and literature.

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