2022 has begun and the majority of Peruvians have already returned to their jobs and businesses with new goals for themselves and their families. In this sense, to help meet these objectives, Pilar Flores, manager of the Financial Risks division of Financiera Confianza, shares four rules to manage debt in a healthy way in the following months.
The monthly payment of your debt installments should not be greater than 30% of your monthly income
That is, if you earn S / 1,000, the payment of all the monthly installments of the loans you have or credit cards must be a maximum of S / 300 soles.
“If you exceed this percentage, you will probably be over-indebted and you will have to correct that situation as soon as possible, because there is a high risk that you will not be able to pay your debts on time and that causes a bad rating on your credit history,” says Flores.
Avoid making cash withdrawals from your credit card
To begin with, the expert recalls that a debit card is not the same as a credit card. With both cards, you can pay in physical or virtual establishments. But, by paying with a credit card, you are using money that the financial institution lends you through a line of credit. That means that you must return the amount used plus the corresponding interest.
“In most cases, withdrawing cash with a credit card is very expensive. Unless it’s an emergency. Even in that situation, think about it before doing it. Remember that when you withdraw money from your card you will pay a commission and daily interest ”, he warns.
If you receive extra money, prepay your debts
Given the good fortune of achieving an extra income of money, Flores points out that you have two options: reduce the amount of the fee or reduce the term; in both cases, they will reduce interest.
“If the payment of your installment causes problems for you at the end of the month and you need the installment to be lower to have liquidity and be able to cover other expenses, then it is better to choose the prepaid option with a reduction of the installment,” he advises.
Take care of your credit history
In her last basic rule, the manager of Financiera Confianza’s Financial Risks division refers to credit history: the evaluation of your behavior in the financial system over time.
“All financial institutions must report your behavior if you are their client and they can see your rating or ‘grade’ in this history, which depends on whether or not you pay your debts on time, whether or not you are over-indebted, among other factors” explains Flores.
“The best thing to take care of your history is to pay your installments on time, have only the necessary debts and not handle several credit cards,” he concludes.
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