Every time a new credit card bill arrives, do you hold your breath, close your eyes and pray? This text is to help you avoid this ordeal and to learn about all the amounts that are charged.
What do that blouse you bought at the beginning of the month, the payment for your furniture and your nephew's gift have in common?
They are everything we pay for with our credit card, forget about it and then come back on our bill at the end of the month to haunt us. That's why it's very important to understand exactly how credit card payments work, what is being charged and what fees and taxes are in place.
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Understanding your credit card bill
The invoice is the document that brings together all the purchases you made using your credit card over a period of 1 month. More precisely, from the closing date of your previous invoice until the date your card is turned over.
To understand it more simply, let's think about open invoice as something you fill out until the closing date.
It doesn't matter if you receive your invoice by email, in your bank's app or physically at home, there will always be a large amount of information contained in this document.
Here's an example:
What information can I find on my invoice?
→ Place where the purchase was made (whether physical store or website);
→ Date of purchase;
→ Number of installments (and the respective installment number being charged on this invoice);
→ Total purchase value;
→ Invoice due date: this is the deadline for payment. If the invoice is not paid by this date, the financial institution that issued the card may start charging so-called late payment interest on the outstanding amount, which will gradually increase depending on the number of days late;
→ Total invoice value: sum of purchases made in that specific period;
→ Minimum payment: the minimum amount that must be paid if it is not possible to pay in full. But remember, if you choose this minimum payment, you will be subject to those unfriendly revolving interest rates (link);
→ Installments to be paid: this is a proposal offered so that you can pay the total amount of the invoice in installments. But here it is the same thing: interest will also accompany you with this option.
What charges, fees and interest can I pay on my bill?
Revolving credit: this is perhaps the best-known (and most dangerous) payment. This type of credit is charged when the full amount of the invoice is not paid (i.e., the minimum payment mentioned above is made) and can exceed 300% per year. To avoid this trap, read our full text on the subject.
Annual fee: this is the fee paid for using the card. It is usually charged automatically. Payment can be made monthly, in installments, or annually, in full. It is worth remembering that you can contact your bank or card issuer to try to negotiate the amount you currently pay for the annual fee.
IOF: if you have made purchases outside of Brazil, or on international websites, you will pay the Financial Transaction Tax (IOF) in addition to the value of your purchases. This tax also applies to transactions related to currency exchange and insurance.
Emergency credit assessment: we have already talked about the importance of knowing your card limit and, more than that, making sure it is an amount that does not compromise other items in your budget. However, in emergency situations, when the limit is exceeded, you can obtain an extra balance from your bank or card issuer. Be careful: this request implies the payment of fees that vary according to the brand, annual fee and other factors, charged on your statement.
Fees for making withdrawals using a credit card: making withdrawals using a credit card can be tempting if you need money urgently. Be aware that this will also involve fees and interest that can make your bill even higher.
Does paying household bills with a card increase my bill?
Few people know, but it is possible to pay household bills, such as electricity and water, using a credit card! These bills cannot be addressed to a legal entity (company) or a third party.
But it's good to know: banks charge varying fees for making this type of payment, ranging from R$$7 to over R$20. Calculate all these expenses to see if it's worth it financially.
What can I do to avoid getting into trouble with my credit card bill?
Knowing your budget will always be the best tip we can give you! By doing this, you avoid being caught off guard and ending up in default.
If things get out of your control in a given month, try to pay off any outstanding amounts as soon as possible (think, for example, about using your emergency fund for this), this way you also avoid the growth of the highest interest rates on the market, on top of the amount to be paid.
