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Is the minimum credit card payment worth it?

If you use a credit card and are struggling to pay the bill, see if it's really worth paying the minimum. Read the text in full!

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Avoid credit card debt

Evite dívidas no cartão de crédito (Imagem: OMES)
Avoid credit card debt (Image: OMES)

Having the first credit card is the beginning of a dream, until the moment of having to decide whether or not to make the minimum payment. That's because your credit limit is increasing and the desire to spend more is even greater. However, all these advantages can fall to the ground if you don't have the money to pay off the entire bill at the end of the month.

In this situation it is very easy to lose control of debt and end up with a dirty name. Therefore, it is likely that you have heard of someone who entered a “snowball”. This is because of debts on the revolving card. But here you will know what to do when there is no money to pay the total card bill.

The minimum payment can put you in a worse situation if you don't know how to organize your debts, as the amount gets higher and higher. This is due to interest, late fee, late payment interest and IOF. They make the next month's invoice amount more and more unaffordable in your budget.

We know that card issues generate many questions. That's why we prepared this post to alert you and show you why you shouldn't pay the minimum bill. Stay with us to learn everything about minimum payment.

How does the minimum payment on the credit card work?

Como funciona o pagamento mínimo no cartão de crédito? (Imagem: Exame)
How does the minimum payment on the credit card work? (Image: Exam)

The minimum payment is usually indicated next to the total amount of the invoice, it is a much smaller amount than the total and many people choose it because it is a simple action. In addition, to make the payment, the customer does not need to negotiate with the company, making the decision increasingly practical.

The minimum payment is nothing more than the resource offered to the customer who is unable to pay the invoice in full. When the minimum is paid, the customer enters the card rotation, which means that he will not be in default or have his card blocked.

On the other hand, the remainder of the invoice that has not been paid is seen as a loan. Then, it is charged on the next bill plus very high interest and late fees on the amount you failed to pay.

Is it worth making the minimum payment on your credit card?

Vale a pena fazer o pagamento mínimo no cartão de crédito? (Imagem: FDR)
Is it worth making the minimum payment on your credit card? (Image: FDR)

The minimum payment alternative can be one of the worst decisions you will ever make. Therefore, be aware of the rules and every procedure of this resource offered to you. After all, what is at stake here is your money. And you know very well that it doesn't fall from the sky to pay interest and more abusive interest.

Let's give you an example: Carla has an invoice of R$ 1,000.00 reais, but she will not be able to pay the full amount this month. So, she opts for the rotary and pays the minimum amount of 150.00 reais. In this case, it will owe R$ 850.00 which will be financed next month.

On the R$ 850.00 Carla will also pay the amount of revolving interest (around 15.85%), late fee (2% per month), default interest (1% per month) and the IOF (Tax on Credit Operations, Exchange and Insurance). So the next invoice will go from R$ 850.00 to R$ 948.72. That is, R$ 98.72 charges only.

If Carla continues pushing the debt every month on the revolving, always paying the minimum, notice that the amount will gradually grow every month. Therefore, in six months the debt that was only R$ 1,000.00 to R$ 1,708.90 made the debt multiply, thus increasing the snowball.

That way, paying the minimum amount will only make you pay even more each month. And with this accumulation of debts, it becomes increasingly difficult to pay off everything and have peace of mind in your payments again.

Is it worth the minimum payment or the installment of the invoice?

Vale mais a pena o pagamento mínimo ou o parcelamento da fatura? (Imagem: EduardoMoreira)
Is it worth the minimum payment or the installment of the invoice? (Image: EduardoMoreira)

Whether you choose to pay the bill in installments or pay that minimum amount that is almost insignificant compared to the total, these alternatives, even though they seem attractive, will demand a lot of organization and financial planning from you to be able to pay off everything.

Financing is done in installments as far as the eye can see and the minimum payment is showered with abusive interest and fines that make you pay more than you really owe. That is, these alternatives will not help you in the long run.

Remembering that unforeseen events can happen and make it even more complicated, preventing you from honoring payments, increasing the risk of default.

Therefore, regardless of the rule, the ideal is to pay the full amount of the invoice without crying. That way you pay off your commitments and don't push the same debt to the next day, which accumulates and gets bigger. Thus, being free to make new purchases without charging interest, fines or taxes is the best option.

New Credit Card Rules

Novas Regras do Cartão de Crédito (Imagem: Serasa)
New Credit Card Rules (Image: Serasa)

To protect the consumer against unpayable debts, the Central Bank changed the credit card rules. As of April 3, 2017, customers without money to pay the full amount of the invoice will be able to spend a maximum of 30 days on the rotary service.

That is, in the following month there will no longer be a minimum payment option, forcing the customer to choose between: paying the full amount or paying the invoice in installments by negotiating with the bank. According to the new rule, you are guaranteed that the amount of the installment fee will be lower than the interest rate of the revolving loan.

Finally, the minimum amount will only be made available again when the customer pays the entire outstanding balance either in full or in installments. This rule means that the client does not enter the snowball, which is the payment of interest on interest.

Another significant change is that until July 2018, the minimum for the revolving service was limited to 15% of the invoice, that is, in an invoice of R$ 1,000.00 reais, the customer paid the minimum for R$ 150.00 reais.

But since then, the rule has changed and the financial institution is no longer tied to the 15%, being able to stipulate the minimum percentage of the invoice based on the consumer's profile, the product, or the risk of the operation. Therefore, the minimum can change more or less.

What to do to avoid the minimum payment on your credit card

O que fazer para evitar o pagamento mínimo no cartão de crédito (Imagem: Celos)
What to do to avoid the minimum payment on your credit card (Image: Celos)

Here you will learn the main tips to avoid the minimum payment and have peace of mind at the end of the month. But first of all know that the best way for this to happen is by investing in your financial education. This is a subject that is rarely talked about in Brazil and we will only learn to take care of our money in times of need or when we experience complications at the SPC or Serasa.

So, don't leave it for later and invest your time organizing your finances and monthly expenses. Get to know now some actions you can take to not fall into revolving credit.

Set a credit card spending limit

Estabeleça um limite de gasto com o cartão de crédito (Imagem: DiárioReservence)
Set a credit card spending limit (Image: DiárioReservence)

When you are recognized by the financial institution as a good payer, they leave your credit limit ever-increasing to spend on whatever you want. However, the higher the limit they grant you, the greater the desire to spend.

This freedom to spend everything on the card can make you lose control of your debts and not realize that you are spending more than usual. And when the bill finally arrives at the end of the month, the amounts are exorbitant, almost impossible to pay.

That's why it's important to set a spending limit with your card. That way you don't run the risk of spending more than you earn and not being able to pay later.

Avoid long installments

Evite parcelamentos longos (Imagem : InfoxNet)
Avoid long installment payments (Image : InfoxNet)

We know that installments are a great opportunity for people to buy high-value products in parts per month and often without interest. Therefore, use this opportunity wisely.

The risk you run by paying in 12 installments is simply having part of your income committed for an entire year. And in the meantime, unexpected expenses may occur or just lack of financial control on your part that compromise payment at the end of the month.

Therefore, when making payments, opt for spot payments as much as possible. Installing a cell phone in 12 installments, for example, can make you lose control over the payment when the amount is added to other purchases that you also paid in installments.

Therefore, avoiding long installments gives you more security to use your card without getting complicated in the future.

But to make large installments, keep an eye on all your expenses and organize them in a spreadsheet. That way, you'll always know when your biggest debts are over, so you can make other significant purchases with the confidence that you'll be able to pay off.

Don't make impulse purchases

Não faça compras por impulso (Imagem: OnzeInvestimentos)
Do not buy on impulse (Image: OnzeInvestimentos)

That flash sale that lasts until today can wait if you want. Generally, stores go on sale on commemorative and significant dates for the market, so choose to wait, be aware of the dates and organize yourself financially to take advantage of the next sale.

This is a very important tip. Avoid making impulse purchases as much as possible, as this way you lose the chance to make a really necessary purchase with the card because you have already spent too much.

For this to work, don't take your credit card everywhere with you, it can make you spend on unnecessary items that weren't planned for that. So, in order not to run the risk of complicating yourself at the end of the month, learn to control yourself financially.

Only carry the card with you when you plan to make a purchase, if you go everywhere with it you will easily be persuaded by promotions and products you didn't even know you needed.

Assess the need for a personal loan online

Avalie a necessidade de um empréstimo pessoal online (Imagem: AnjoCred)
Assess the need for a personal loan online (Image: AnjoCred)

Personal loan also known as personal credit is offered by financial institutions and is easily accessible, an option for those who need money quickly for unforeseen circumstances or to pay off debts.

There is the option of credit portability in which it is possible to transfer your debt to another financial institution with better conditions. Thus increasing competitiveness between institutions.

This operation is a consumer's right and aims to offer fairer conditions for Brazilians who still pay dearly on many lines of credit due to lack of this information.

That way you have the opportunity to exchange an expensive debt for a cheaper one, improving payment terms and reducing interest rates.

I've already got involved in the revolving interest, now what?

Já me enrolei nos juros do rotativo e agora? (Imagem: Nextin)
I've already got involved in the revolving interest, now what? (Image: Nextin)

If your credit card problem is chronic, seriously consider canceling this service. On the other hand, if it was a one-off situation that caught you off guard, you can make peace with it and start using it in moderation.

If you've ever lost interest in your credit card revolving credit card, don't worry, there's a way out of everything. Now it's time to negotiate the debt and pay it off as soon as possible.

  • Start by becoming aware of the total amount of your debt and understanding what your rights are as a consumer who owes you so as not to fall into abusive practices.
  • Stop using the card until you get financial control and pay off your debts.
  • Add your debts and how much you earn to get an average of the amount of installments you can pay per month, so you can consider a possible installment payment
  • You can also take out a loan and pay off expensive debts, exchanging the abusive interest on the card for interest on the loan that can be negotiable and lower.

That way, you won't have to make the minimum payment on your credit card because you don't have enough resources to settle the bill, and you won't even have to get complicated with uncontrolled debts.

8 credit card options with a dirty name

Did you know that it is possible to apply for a credit card even if you have a dirty name? See the best options on the market and choose yours.

About the author  /  Heloisa Trindade

I'm Heloisa Trindade, journalist at DRT 1424/MS in Campo Grande, graduate in publicity and advertising at Estácio de Campo Grande, editor and content producer for 4 years. My passion for reading and writing came since I was a child, influenced by my mother. In the midst of a financial crisis, I discovered that I could use my passion to generate income and that's when I started my first blogs. My goal is to always deliver true, quality content and information to our readers.

Reviewed by  /  Junior Aguiar

Senior Editor

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