Do I fall into default if I only make the minimum payment of the credit card?
You may not know what happens when you only make the minimum credit card payment. If so, surely you want to know the consequences of this, and if it implies falling into default. You can clear your doubts by carefully reading this article.
What is the minimum credit card payment?
The minimum payment is the lowest payment you can make to the grantor of the credit so that he does not declare you delinquent. Then, it is impossible for you to fall into default or financial delinquency if you make the minimum payment of the credit card.
Now, you must understand that the minimum payment is the lower limit of the allowed payment. That is, you can cancel an amount greater than the minimum payment without any problem, which is even convenient for you. Remember that the longer it takes to pay your card debt, the higher the interest to be paid.
What happens when I make the minimum credit card payment?
The first thing that happens when you make this payment is the aforementioned: you do not go into default. That is, by making your minimum payments on time you achieve an adequate credit history, with the consequent benefits that this generates.
The Superintendency of Banking, Insurance and Private Administrators of Pension Funds of Peru (SBS) regulates this payment. The SBS determines how the instruction should use your credit card payments, whether minimum or higher.
Remember that with the same credit card you can assume two types of debt:
- Debts acquired without specifying a quota amount, called revolving debts.
- Debts made by specifying a fixed number of installments, established at the time of payment.
The SBS has established a regulation for the use of your credit card payment that is beneficial to you. In the case of the minimum payment, a significant portion of it is dedicated to the cancellation of the revolving debt. And only a fraction of the payment of debts acquired in installments. In this way, the payment of the type of debt that generates the greatest interest is prioritized.