Before you take the card out of your pocket, pay attention to its available limit!
We’ve already shown you what you can do to save money with your credit card. One of the main reasons that drive people to drown in debt is the misuse of the credit card limit.
When we make a purchase on credit, for example, we are spending a part of the predetermined limit on the card requesting act. Let’s first explain what the threshold is and how it works.
What is it and how much do I have at the credit card limit?
It is a fixed amount that – as the name says – limits your spending to a certain amount.
This amount will be set at the time of hiring the card, where your income will be analyzed, along with an estimate of how much you can spend per month, according to your salary. That is, it is defined by the bank and only it can change.
Ex: A person has a card with a limit of 800 reais, and spends 300 of that limit on a purchase installment for 3 times without interest. Your limit will now lower to 500 reais (R $ 800,00 – R $ 300,00).
Each month, as you pay the installments, your limit will rise – considering that, in this case, you would pay 100 reais per month, in the first month the purchase limit would increase from 500 to 600 reais, and so on.
Remember that if you spend 300 reais of your limit – given in the example, you will not be able to buy anything from 800 reais until you pay off the debt, since the only limit you will have available in the first month will be 500 reais, with an increase of 100 reais each month.
We’ve produced a video to explain how it works and how to increase the credit card limit.
And how do I increase my credit card limit?
It is common for a person to start earning more and want to increase the limit of their credit card. But not even income is made the ceiling of the card.
Factors such as defaults or late payments can be a barrier to increasing your credit. So, nothing to stop paying your bill or forget to make the payment of the bills!
The factors, however, vary greatly among the financial institutions that offer the credit service. It is always good to talk to the manager and stay alert to the details and deadlines stipulated in the contract.
Credit limit x withdrawal limit
There are differences between these two different types of limit of your credit card. The personal credit limit, as already mentioned above, is the total amount that the institution that manages the card makes available to the customer.
It is defined at the time the card is purchased, and is based on your income and purchasing profile.
Already the service limit is the service that some cards make available, functioning as an emergency service. It is not usually linked to the credit limit, so the customer can make the emergency withdrawal without modifications in the value of the limit for purchases.This form of withdrawal, however, is subject to interest and fees, making it necessary only on an occasion of real necessity.
There is also the limit available that, as its name indicates, shows the value that is available to the client at the moment of the query.When buying a product of 400 reais in a limit of 1000, the limit of the available credit card will be 600 reais, for example. The card can not turn into a villain! You need to figure out the expenses and get your questions answered (a tip is to look up frequently asked questions on financial institution websites).
Deferred purchases should only be made if planning in advance, for example, it can be an advantage to use them on travel.
Be sure to choose the best payment date for your invoice: check the days you will receive and choose a day on which you will have the money.
If you wind up with credit card installments, one option is to hire a personal loan, which usually has lower interest rates. Or make a paycheck-deductible personal loan where interest rates are even lower!