Find out about the fees that may be charged on your credit card
Do you have a credit card? If so, do you know what all the fees that can be charged for using this payment method are? Unfortunately, few people know exactly how a credit card works and how much it can cost at the end of the month.
With this in mind, Conta Corrente has put together some important information about credit cards so that you can better understand how they work and avoid getting into financial trouble with them. If this topic interests you, stay with us in the following paragraphs!
How does a credit card work?
You may not have realized it yet, but the credit card is a type of loan offered by banks and financial institutions. The usual payment term is approximately 40 days. When requesting the card, the bank grants a credit limit that can be used to make purchases of products and services.
One of the main benefits associated with it is the ability to pay for a purchase in installments. Imagine that your refrigerator stopped working and you weren't prepared to buy one right away. At the same time, you can't afford to be without a refrigerator, right? The card helps in situations like this, because you can use it and make the purchase in installments that fit your budget.
And how does the card operator make money?
The card operator is the company responsible for mediating the payment from the customer to the seller. It can be a bank, a fintech or a financial institution, for example.
The main way these companies make money is through transaction fees, which are fees charged to retailers for offering their customers the option to pay by card. For each transaction made using a card, the merchant is charged a fee that is divided between the operator, the machine and the card brand.
What are the credit card fees?
Each bank has different fees. The most common of these are maintenance fees and charges, such as the annual fee for a credit card. Despite the name “annual fee”, many banks often charge this fee in monthly installments, which are included in the monthly bill. Fees may also be charged for withdrawals and other charges, such as:
- Emergency credit assessment: triggered by the customer who exceeds the limit;
- Bill payment: applied when the consumer pays invoices or bills using the card (such as electricity, water bills, etc.).
- Automatic message sending fee whenever there is movement with the card;
- Charge for customizing the card design or layout;
- Issuing a second card: subject to charges when requesting a new card due to loss, theft, robbery, among other reasons.
What about credit card interest?
In addition to the fees mentioned above, cards charge interest when the customer is late in paying an installment, or pays only part of it. In case of default, the user may also have to pay late fees (the so-called mora) in addition to late fees.
There are also revolving credit fees, which are charged when the user pays the minimum amount on the bill and leaves the rest of the bill to be paid in the following months. This type of fee is very high, so you should avoid paying only part of the bill as much as possible. In the long run, the debt that was small becomes very high.
It is worth noting that credit card interest rates in Brazil are the highest in the world. Therefore, it is very important to have good financial organization to avoid letting the card disrupt your budget and lead to debt.
As we have seen, there are some points that deserve attention before signing up for a credit card. It is very important to pay attention to annual fees and revolving credit, for example, in addition to checking whether there are charges for withdrawals and other services.
