The Impact of Minimum Payments on Argentinian Users in the Face of Inflation and High Interest Rates

Financial transactions are one of the main payment methods in Argentina, with the Credit cards as the means chosen to carry them out.

Despite the fact that its use has decreased in the country in recent years, the Government applied rate increases in recent months to keep Argentine investors in pesos.

However, the unwanted effect of this is the increase in borrowing costs And that’s where refinancing credit card balances comes in.

When it comes to paying these amounts, a strategy applied by those who do not have all the money available is make the payment of the minimum amount to, in this way, finance the remaining balance.

What happens if I pay the minimum on my credit card?

Depending on the entity issuing the corresponding plastic, the minimum amount is generally equivalent to 5% or 10% of the debt and is made up of interest, commissions and taxes. Thus, if the minimum payment is paid every 30 days, the amount of the original debt will never be reduced.

He minimum card payment It is an amount determined by the bank as the smallest amount of money that the latter accepts to keep the credit standing and not declare the customer in default.

However, at pay he minimum amount, los interests with accumulate over timewhich means that the following month is more “complicated” to pay.

How many times can the minimum card payment be made?

As such, there is no limit to make minimum payments with the card. However, being 10%, many times, the interest generated exceeds the minimum amounts themselves.

This is due to what is known as ‘compound interest’, that is, the interest that applies to other previous interests. In the event that the debt exceeds the available amount of financing provided by the entity, the possibility of making the minimum payment will be terminated.

If this were the case, the bank will demand he full payment of the debt and they will enter into default, and they will begin to incur high interestwhich are added to other possible expenses, in addition to affect the user’s credit profile.

In this situation, specialists recommend that, in the event of not being able to pay the total amount on the card, the best thing to do is to resort to paid what slightly above the minimumto reduce the interest burden and reduce the debt progressively.

How much is the interest if I pay the minimum on the card?

He interest for him minimum payment of the card is different according to the bank, although this is usually slightly superior to that of a loan, since the bank finances the consumption of the person.

As such, there is no limit to making minimum payments with the credit card

to know the interest that must be paid in the case of carrying out the minimum payment, the user will be able to see it in the summary, next to the amount of the “minimum payment”.

Another way to find out the interest for the minimum payment is check directly with the bank in question: the different private homebanking allow you to consult.

What happens if I do not pay the minimum card payment in full?

If the minimum payment is not paid in full or not paid directly, the person will default and the bank will disable the credit card.

Additionally, the bank will no longer request a minimum payment, but will claim the total debt, that is, the amount initial plus the Accumulated interests that, according to the time that has passed, these can become superiors al valor of the purchase initial.

Even, the non-payment will affect the credit profile delinquent with other financial institutions and could even appear in the Central Debtors of the BCRA.

Appearing on said list would cause, for example, banks and/or financial companies to be reluctant to grant loans or certain services and products such as cards of high amounts.