Is it possible to evade high interest debt? Yes! Who says there is no way is because they do not know how to manage their personal finances. That’s why Apendico today lists 5 surefire tips to help you keep away from high interest on debt or financial commitments!
1. Don’t buy without searching!
Search, search, and search whenever you want to purchase any type of item. Whether it’s a new home computer, a smartphone, clothes, or any other non-fixed expense (water and utility bills, transportation, health). Consider the immediate need for the item and, if not important, don’t worry and save the money gradually and maybe even get a bargain because you’ll pay in cash.
2. Know Total Effective Cost, Not Interest Rate
This is the main pitfall of most agreements. Whenever interest is involved, companies only show this rate and leave the Total Effective Cost (POT) at the time of signing the contract. Still don’t know what POT is? It is the sum of interest rate, charges and IOF!
3. Bargain in debt with your Registrato!
Don’t know Registrato yet? Information Record Extract, also known as Registrato, is a system that provides information about your bank history and facilitates the assessment of banks when you apply for credit. With it, you can negotiate better interest rates. The system was developed by the Lite Lender in 2014 in order to facilitate the citizen’s search for their financial history, so the institution is responsible for providing the information.
4. Do not enter the credit card revolving!
With an interest rate of around 470.9% per year, this is the most expensive credit line in Brazil. How to get away from these abusive interest rates? Simple: Always pay the full amount of your credit card bill and don’t fall for it, as there is a great chance that it will generate new debt due to the lack of planning and prioritization of fixed expenses.
5. Your overdraft isn’t as special as you think…
The name is special, but you should be very careful when using it. Overdraft has the second highest interest rate in the market, second only to the revolving credit card, with an average annual interest rate of 315.7%. So our tip is that if you have to use this line, it is only for emergency situations and it covers the amount that was used as quickly as you can. Otherwise, it could develop into non-performing debt.