Silvana Saldisuri
05/06/2021 6:01 AM
Clarín.com
Services
Updated 05/06/2021 6:01 AM
The
pandemic
Covid-19 has impacted on the way
of buying and paying
for Argentines.
Thus, during the last time the use of
debit cards gaining ground to cash, and also the use of Now 12 with credit cards, according to a private report.
Inflation in April was around 4%, and prices rose 40.9% in the last year, according to recently published data from the Consumer Price Index (CPI) by consulting firm Orlando Ferreres.
Against this background, in order to reduce the impact on the domestic economy, it is important to know the main characteristics of both the
credit
and
debit card
and what are the best ways to finance yourself to take advantage of opportunities.
The pandemic had an impact on the way Argentines buy and pay.
Photo: Clarín Archive
Debit card vs.
Credit card
The main difference between
debit and credit card
is that the first is always associated with the balance that the customer has in the bank account, while the credit card allows you to operate with money loaned by the financial institution.
When money is withdrawn from an ATM with a debit card or a payment is made with it, the amount of the operation is
automatically deducted
from the balance of the associated account.
In fact, if there is not enough balance to carry out the operation, it will be denied.
On the other hand, when the credit card is used, the bank is the one that is lending the money.
That money will have to be returned the following month or in several installments (installments), which often have an interest.
One way to finance yourself with your credit card is to make purchases for the month the day after the account statement arrived.
Photo: Reuters
In this case, the financial institution advances the money regardless of the balance in the account.
For this reason, before granting a credit card, the bank studies the viability of the client, making sure that it is solvent.
Even so, the credit card
has a limit
.
What are the credit card payment alternatives?
1) Pay the total:
the sum of all the installments for that month is paid with interest included, if any, plus administrative expenses of the bank.
Paying in full, means that what was agreed between the card and the client is being fulfilled 100%.
2) Pay the minimum:
the bank gives the option of making a minimum payment, if all the money necessary to make the total payment is not collected.
This option involves paying additional interest to the original, which will be calculated based on time and the amount owed.
It is important to know that, if at least the minimum is not paid, the card will be blocked.
3) Partial payment:
in the case of having more money than the minimum to pay, but you do not have the necessary money for the total payment, there is the possibility of making partial payments.
The difference between the total payment minus the partial payment will be the new outstanding balance.
Once it is paid, the next summary will show interest, which will be calculated based on that amount and how long it took to pay off that outstanding balance.
Advantages of paying in cash
The cash payment can be made in
cash or by debiting it
from a checking or savings account.
You do not have to be aware of expiration dates to
pay the card summary
.
Future
debts are eliminated
.
Cash purchases sometimes offer
more discount options
.
There is no
interest
charge
.
In recent months, the use of debit cards has skyrocketed, gaining ground on cash.
Photo: Reuters
Advantages of paying in installments
It is an alternative for those who do not have enough
money
to purchase goods or services that cannot be postponed.
By being on time with your debt payments, you are building a
good credit history
, which opens the doors for you to have future credit and build a good name as a debtor.
Paying in installments can help to alleviate the personal economy and not to get rid of the cash all together, as long as the own level of indebtedness is managed very well.
What are the current opportunities to finance purchases?
Credit:
One way to finance yourself with your credit card is to make
purchases for the month
the day after the account statement arrived.
“In this way, there will be an additional 30 days for the summary to arrive again, plus the 10-day deadline to pay it.
In total, it will be 40 more days to pay that monthly expense account.
If the current inflation is in the order of 4 and 5%, then it is possible to
save
in that period
between 6 and 7%
, only for that administration in the payment ", explained to
Clarín
the economic analyst and director of Focus Market ,
Damien Di Pace
.
“In the case of financing the
'Now 12' plans
, it continues to be the most sought after for durable goods, especially due to the value of the quota in relation to the evolution of inflation, and the improvement in income in a relative way over time. .
In short, it has an
interest rate
and a
financial cost that is
well below the rest of the credit card operations, ”he said.
"Although
retail sales
grew in year-on-year terms after the strict quarantine, they fell in real terms with respect to 2019. Therefore, to encourage consumption, there are currently
offers, promotions and discounts in 3 and 6
installment
plans
that are to be taken advantage of" Di Pace noted.
Debit:
The use of debit cards has grown in recent times as it has practically become a requirement in order not to manipulate physical money, and because there is an
important stimulus
for its use by large supermarket chains.
According to the economic analyst specialized in consumption, "
during the week
, which is when there is less flow of people within these chains,
discounts
are offered
with different debit cards of
10% and up to 15%
, if any card is also added. of loyalty of the chain.
Therefore,
from Monday to Friday,
it is advisable to use the debit card to
buy food
”.
LN
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