Is taking out a credit card loan really worth it as a way to overcome the crisis? The world is experiencing a true structural shift due to the novel coronavirus, which has already shaken the foundations of major countries.
Faced with chaos, for many people, the only option left is to use either the revolving credit on their credit card, through the interest on the special check, or take out a loan. What is the best option?
For this reason, many people in Brazil and around the world are concerned about the economic consequences of the novel coronavirus, which is currently spreading at an alarming rate. This is because the only way to contain the spread of the virus, which still lacks a vaccine, is social isolation.
But without further ado, right? Let's get to the point? Money!
It's worth noting that many businesses have had to close their doors to protect their employees' health, and as a result, we, as customers, are at risk of running out of money. But is it worth using your credit card's revolving credit during the coronavirus crisis to ease your finances? Or taking out a loan on your card?
Our first answer is: yes, if you will be able to pay in the future and no, if you are doing it out of desperation.
But what is the difference in interest on a revolving credit card?
Come on, it's simple to understand; look: when you don't have enough money to pay your credit card bill in full, there are two possibilities: make a minimum payment (or a larger payment, but less than the total amount of the bill), or pay in installments.
This way, installment payments allow you to pay the amount due in fixed monthly installments. Once you make the installment, the deal is finalized, and you can't back out, even if you owe the remaining balance on the invoice.
And another important point: you can even pay everything you owe, but interest will have to be paid as well.
In general, interest rates are lower in installments than in revolving credit.
However, revolving credit allows you to pay part of your bill and pay off the debt within the current month, which can be a good alternative for those hoping to resolve the problem soon.
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Source: Economic Value