In April 2017, the PC Bank waved good news: It banned banks from financing the revolving credit card – the highest interest rate credit line in the market – for more than a month. Since then, the customer who pays the minimum and stays more than 30 days in revolving credit is referred by the bank to a installment line. facenba.org has examples
It was an initiative to lower interest rates and reduce default. But after a year, there was a side effect: the alternative to the revolving, the installment, became more expensive.
Revolving credit interest rates fall, but installment interest rates rise
Until then, every month, anyone who chooses to make the minimum invoice payment (or anything other than the entire invoice) automatically falls into the loop. And so on, paying more interest each month.
Today, it is no longer possible to pay the minimum invoice amount (15% of the total amount) for several months in a row. If the outstanding balance is not repaid for the second consecutive month, the bank is required to offer a debt installment option with interest less than revolving.
The objective of the measure was to reduce interest rates, avoiding a large debt. But while the interest rates on the revolving fell, the installment rates increased.
Revolving X Installment
Revolving credit closed 2017 with a significant drop: 169% over the previous year. Already the installment credit rose from 153% to 169% in this period.
In 2018 interest rates continued to rise in both modalities. According to the PC Bank’s latest announcement, on April 26, interest rates closed March at 334% in revolving and 169% in installments – a slight decrease after reaching 174% in February.
|328% per year||
153% per year
|169% per year||
169% per year
Healthy Credit: Swap High Interest for Low
If every month you are short of money to pay the full amount of your invoice, it may be time to consider hiring a healthy credit.
The best strategy for debts not to snowball is to swap all expensive debt for a cheaper line of credit, such as CGI.
Swap the revolving credit with secured property
Widely used by those seeking higher amounts in CGI you place a property as collateral for the loan – at Bosscredi, the credit value can be up to 50% of the property value. This bank guarantee reverts to you in the form of much lower interest rates (from 0.99% per month) and longer repayment terms (up to 180 months).
Traditional banks tend to offer this as well, but prefer to disclose higher-rate lines of credit (such as credit cards or overdrafts), because these categories represent more profit. Already in a fintech like Bosscredi, which combines the best of technology in order to facilitate your access to credit, you not only have access to this line but can apply and follow all the steps of the online process, without leaving home!
How about consolidating your debts and start paying less interest? Enter our website and make a simulation.