The credit card renewal increases and the overdraft interest decreases

The credit card renewal increases and the overdraft interest decreases

The revolving interest rate, the highest in the credit market, rose between February and March from 326.8% to 334.9%. On the other hand, the interest rate decreased from 124.9% to 121% annually. The information was provided by the Central Bank (BC).

In 2020, there was also a drop in interest on your overdraft, in the same period as the current survey. At the time, the interest was 130.6% per annum. According to the standards of BC requirements, the method cannot exceed the maximum of 8% per month, which is equivalent to 151.8% per year.

However, interest rates on revolving credit cards have increased compared to the same period last year. In March 2020, the registered value was 328.7%. A rolling invoice refers to the fees charged when the customer is unable to pay the full amount of the invoice on the due date.

Interest in these two methods remains high, however, as they are average records, interest may vary according to each case. This is because each financial institution charges different fees according to the plan that the customer contracts.

Revolving card and interest overdraft

Regarding an overdraft, this is the amount that a bank allows a customer to keep his account active even if it is negative. Thus, the organization provides an additional limit to the customer who needs to cover their expenses, rather than blocking the account.

In practice, when customers enter an overdraft mode, banks must notify them immediately, as when entering this method, they are subject to paying very high interest rates, even though the average percentage has decreased recently.

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However, credit card revolving interest refers to the method that is determined when a customer fails to pay the full amount of his card bill. In this sense, it ends up adding the remaining amount to the next month’s payment, bringing with it the interest receivable, called revolving credit.

However, according to the central bank, the recently recorded figure indicates that the average of this interest was higher.

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About the Author: Camelia Kirk

"Friendly zombie guru. Avid pop culture scholar. Freelance travel geek. Wannabe troublemaker. Coffee specialist."

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