Credit card: how to use it and what to control

The credit card allows you to make purchases and payments on credit. It is key to understand your limit, the interest, the monthly summary and the conditions of renewal and cancellation.

A credit card is a payment instrument that allows purchases or payments to be made on credit, issued by a bank or card issuing company.

The entity sets a credit amount to operate, related to your income. Unlike the debit card, the funds do not have to be previously in your account: as you use the card, a debt.

Each month the entity sends a summary with:

• – All transactions made.
• – The expiration date.
• – The total amount owed and the minimum payment.

Can:

• – Pay the total of the summary.
• – Pay only the minimum payment or an intermediate amount, financing the rest.

Debt that is not paid accrues interest, and many cards allow you to finance purchases in installments.

It is not advisable to pay only the minimum payment permanently, because outstanding debt generates increasing interest.

When evaluating a credit card, it’s important to review:

• – Compensatory interest rate (for financing purchases).
• – Punitive interest rate (for not paying the minimum).
• – Minimum payment amount.
• – Fees for exceeding the purchase limit.

There are regulatory limits:

• – The compensatory interest rate cannot exceed by more than 25% the rates applied by the bank to personal loans without real collateral.
• – The punitive rate cannot exceed by more than 50% the compensatory rate applied to the card.
• – The maximum rate for financing credit card balances cannot exceed 25% of the average rate of open market personal loans published by the BCRA.

It is also important to:

• – Read the conditions of promotions and benefits carefully.
• – Check if the card is only national or international.
• – Control the monthly summary to detect improper consumption and claim if it is not received on time.

Consumption in foreign currency can be paid with dollars or pesos.

• – If you pay in pesos, the selling exchange rate at the time of cancellation is applied at most.
• – If you pay on a non-business day through home banking, mobile banking or ATM, the selling exchange rate of the immediately preceding business day is taken.
• – If your card is from an issuing company and not from a bank, the payment in pesos is made at the exchange rate sold through electronic channels published by the Banco de la Nación Argentina on the same business day of payment (or the previous business day if you pay on a non-business day).

If you have an automatic debit card payment and the balance in your account is not enough to cover the total amount (minimum or total payment), the bank must:

• – Debit up to the amount available on the same day.
• – Notify you of the situation by electronic means and tell you how to settle the missing amount.

• – The bank must notify you about the renewal of the card in the last three statements before expiration.
• – Any change in charges or commissions must be reported at least 60 calendar days in advance.

You can cancel the automatic renewal by notifying the bank 30 days in advance.

• – You can request the cancellation at any time by reliable means.
• – If there are debts, the bank cannot require you to cancel them first as a condition for processing the cancellation, although it may require face-to-face management when there is an outstanding balance.
• – You can cancel the card even if you have consumption in installments that are due: they will continue to be charged as agreed, but they will not be able to charge you any more maintenance charges.

If you receive a card at your home that you did not request, you are not obliged to activate or use it. Can:

• -Destroy.
• – Return it to the bank.
• – Make a claim for the shipment without consent.