According to figures from the Bank of Mexico (Banxico), around 20 million people pay rates of almost 70 percent for debts on credit cards and personal bank loans.
On the other hand, a report published by the company yotepresto.com reveals that, despite being aimed at different audiences, classic and gold cards charge similar interest rates and a Total Annual Cost (CAT).
“The difference between the average rate of classic cards and gold cards is only 4.2 percentage points.”, Is indicated in the document, which was drawn up after analyzing 60 cards issued by the largest banks in Mexico.
With regard to CAT, something similar happens, says the firm in the report, since between both categories of plastics there is hardly a difference of 4 percentage points.
In that order of ideas, it is logical to look for strategies that allow you to pay less interest, one of them is the transfer of debts.
What does it mean to transfer debts?
The transfer of debts consists of paying off one or more card debts, for example, with a personal loan whose interest rate is much lower than those of plastics.
In practical terms, a person could zero out one or more cards that charge 50 percent rates with a credit whose rate is 20 percent, that is, 30 percentage points less.
Advantages of transferring debts
The main advantage of transferring debts is savings in interest, which can be more than 50 percent.
Another advantage is that it makes debt management easier, since people now only have one payment date, instead of two or more.
Another point in favor of the transfer of debts is that, unlike other strategies, it does not affect the history or the credit score of the people.
When is not an option
Despite its advantages, transferring debts may not be a good idea when the interested party plans to continue borrowing with their credit cards, because in that case they will now have more debts than they originally had.
How much can you save?
Based on a simulation performed with a calculator From yotepresto.com, for a debt of 100,000 pesos with a gold card, you would end up paying the bank almost 120,000 pesos just in interest.
On the other hand, if you transfer the same debt through the company, you would pay 24 thousand pesos, which represents a saving of more than 95 thousand pesos in interest.
Of the more than one billion pesos that the firm has delivered in personal loans, 70 percent have been allocated to the payment of cards and bank loans, which represents a saving of more than 300 million pesos in interest.
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Reference-www.eleconomista.com.mx