How to repay credit cards

With credit cards, the customer’s debt only arises after the card is used and, therefore, the repayment plan is not set at the outset.

Customers and the credit institution agree in advance on a repayment modality for the amount of credit used, as well as on the date on which such repayment must occur.

Bank customers can usually choose:

  • Payment in full (100%) of the credit used at the cut-off date, which means that they do not pay interest;

  • Partial payment (with imposition of a minimum amount or percentage) on the cut-off date, which implies the payment of interest on the amount used and not paid in that month.

The less paid per month, the higher the amount of interest that the customer will have to bear and the longer it will take to pay off the total amount owed.

Regardless of the agreed repayment modality, there are credit cards that include a free-float credit period.

The cards can be:

  • Cards with a free-float period – cards that allow the use of interest-free credit for the period that corresponds to the time between the date of purchase of the good or service and the date of payment of the balance of the card. In this case, the interest is counted as of the date of issuance of the monthly statement, in the event that the customer does not repay all of the amounts owed;

  • Cards without a free-float period – cards that, in at least one payment modality, do not allow the use of interest-free credit. In this case, the interest on the amounts that are not paid on the agreed date will be counted from the moment the card is used.