In a world where digital money has become almost as important as physical money, the way we manage our payments can have a profound impact on our personal finances. The freedom to buy today and pay later seems tempting, but it requires responsibility and discipline to avoid becoming a financial trap. That’s what can happen when you have a credit card in your hand.
Credit cards are, today, a common tool in everyday life, allowing you to purchase goods and services without having to have cash available immediately. This facility, however, is also the main cause of default on consumer credit in Portugal. The possibility of postponing payment can be useful in many situations, but it also increases the risk of budgetary out-of-control and over-indebtedness, says the website Minuto Finanças para todos, belonging to Correio da Manhã.
Immediate purchases, postponed bills
The main function of a credit card is to allow purchases, online or in physical stores, even without a balance in the account. Payment can be made in full, normally between 20 and 50 days after the transaction, or in installments, with interest.
To avoid additional charges, the most advantageous option is to always pay the full amount within the deadline. If you prefer to pay in installments, you should look for cards with lower interest rates, as these vary significantly between entities.
Before 2010, the rates charged could reach very high values, reaching around 30% in old contracts. If you have a card issued at that time, it may be wise to cancel it and request a new one with more favorable conditions. Since then, Banco de Portugal has imposed limits on effective interest rates on consumer credit, reviewing these values quarterly, according to the same source.
Legal limits and additional costs
Controlling interest rates aims to reduce cases of default and protect consumers. Currently, the limit set for credit cards is around 19%, a value that has been increasing since 2023. Exceeding this limit is illegal and considered excessive interest.
In addition to interest, there are other costs to consider, such as the annual fee. Some institutions offer cards without this expense, although often only for the first year. Checking all associated costs before hiring is essential to avoid surprises.
Advantages beyond payment
Despite the risks, credit cards also offer interesting benefits. In addition to the possibility of splitting payments, many include insurance packages, accumulation of points or miles, cashback programs and even emergency credit. These advantages can be especially useful for those who travel frequently or want to maximize their purchases.
Choosing the most suitable card depends, above all, on how you intend to use it. Those who always pay the balance in full should favor cards with low annual fees and additional benefits. Those who prefer split payments should look for a reduced APR, ensuring that interest does not compromise the monthly budget.
Conscientious use and informed choices
Regardless of which option you choose, the main rule is responsibility. Impulsive use can quickly turn into debt that is difficult to control. The ease of purchasing, especially on online platforms, encourages spending that is often unnecessary, so financial discipline is essential.
Before applying for a credit card, carefully read all the terms and conditions and compare different offers on the market, recommends . An informed decision not only avoids excessive charges but can bring significant benefits to your daily life. After all, when used well, a credit card can be a valuable ally, but when poorly managed, it becomes one of the biggest enemies of financial balance.
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