Black Friday is upon us....watch out when paying by card!
“Black Friday” is all the rage in this country and many people wait for it to buy all kinds of things: electronics, sports equipment, household items, etc.
If you buy anything, you will probably use your bank card to pay. If so, be aware of the type of card you are going to pay with, since, depending on how you use it and on the payment method in your agreement, you may run up more debt than you intended.
If you are using a deferred payment credit card, you will have to repay the amount you have spent, plus any interest, in monthly instalments. These instalments, which may either be a fixed amount or a percentage of the debt, are indicated in the card agreement. Bear in mind that if your instalments are very small, repaying the debt may take a long time, and you run the risk that the instalment may not even cover the interest generated, so that the debt increases after each payment, instead of decreasing.
With this calculator you can find out the date when you will finish paying off your debt, according to a reference date and your card details.
If you use a credit card in the strict sense, your total purchases will be deducted from the balance of the linked account on the date indicated in the agreement (at the end of the month or at the beginning of the following month), and normally no interest is charged. The usual limit on this type of card is your available credit, for which a maximum amount will be set in the agreement. However, if your bank allows you to go over your limit, it will apply the over-limit rate, which you will have to pay together with any other interest and fees due.
If you use a debit card, your purchases will be charged to your account immediately. The usual limit on debit card payments is the available balance of the linked account. However, in some cases your bank may allow you to withdraw money even if your account lacks sufficient funds, giving rise to an “overdraft”, with the corresponding overdraft fee.
So, if you are going shopping on Black Friday, use your card responsibly and be fully informed, to avoid nasty surprises.
3 tips for using bank cards:
- Do not change your credit limit at an ATM
- Use a specific card for your online payments
- If you are going to ask for a loan, always check the APR (true cost of credit)