Understand the new credit card revolving rule

The government announced in 2017 new rules for the use of credit card revolving. The change should bring relief to the consumer’s pocket starting in April, but don’t get carried away. Using the credit card rotary will continue to be very expensive! So that you understand the change and know better credit options than the rotary, today we have prepared a special post for you.


Let’s understand how the card works today

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Currently, after shopping and spending using the credit card, the consumer receives the invoice. If you do not pay the full amount of the bill, you fall into the so-called revolving credit card, with interest rate of about 15% per month, which is about 435% per year. Thus, doubtfully becomes a snowball. The interest on the revolving is accruing and increases the amount due.

The new rule says that consumers can only rotate for 30 days. After that the bank will have to submit a proposal for the installment of this debt. Some banks have already announced installment interest rate ranges, but most consumers are expected to stay around 8% per month.


Installment payment may not be the cheapest option?

Installment payment may not be the cheapest option?

To show you, we did a simulation. Let’s say you fail to pay a card bill of $ 1,000.

Under the current rule, you would pay $ 2,213.76 at the end of a year if you only hit the minimum bill every month. Under the new rule (ie using the revolving for 30 days and then parceling out the amount), debt would be $ 1,771.99 after one year. In the personal loan, the amount would amount to $ 1,381.56.

This means that the rule change will save the consumer about $ 440 in interest on the revolving. But if you opt for a loan, the savings rises to $ 832.


Loan interest rate

Loan interest rate

And look, we are talking about a loan with an interest rate of 5.36% per month (the average charged by the big banks). There are ways to further decrease the value by researching interest, for example. To do this, use the Guide Payment loan tool, available on the website and application. It shows a list of best offers for your profile and the hiring is all online, on time. To give you an idea of ​​the economy, Just, one of the platform’s partners, has offers starting at 2.8% per month, which reduces the debt value, after 12 months, to $ 1,191.20.

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