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Knowing the modalities available and comparing offers are two fundamental actions, of according to the National Association of Credit Bureaus
São Paulo, December 08, 2021After almost two years of the pandemic, store windows and stores are betting big on novelties to attract the attention of consumers this end of year. However, you need to be alert to avoid the pitfalls of over-consumption and indiscriminate use of credit to ensure a peaceful 2022.
According to data released by National Association of Credit Bureaus, In October, Brazil had 63.4 million defaulters, with banks and credit cards leading the ranking of outstanding accounts. This number of defaulters indicates that Brazilian consumers need to pay more attention to their spending, especially as economists' projections for next year point to a scenario of inflationary pressure and economic challenges.
“Credit can be an instrument of well-being, but easy access, without taking into account the principles of financial education, tends to generate more consumption than necessary, contributing to default and over-indebtedness,” says Elias Sfeir, president of ANBC.
“According to a survey conducted by the credit bureau sector, more than half of those interviewed said that they usually buy in installments without carefully controlling their spending. We therefore need to take some precautions to use credit as an ally without turning it into a long-term enemy,” he adds.
Some tips listed by the National Association of Credit Bureaus can help you maintain a healthy relationship with credit in 2022:
1) Knowing and understanding the real needs of the momentBefore applying for any type of credit, it's important to make a realistic diagnosis of your situation, taking stock of your income, current expenses and other commitments you've already made.
2) Understanding the modalitiesThere are several types of credit, each with its own cost and purpose. Payroll loans, for example, can be a lower-cost option for formal workers. Overdrafts, on the other hand, charge
The interest rate is much higher and should only be used in cases of last resort and paid off as soon as possible.
3) Search and compare offers: Just as when choosing a good or service, researching the best conditions also applies in the context of credit, with the cost represented by tariffs and interest rates. Once the consumer has decided to take out a loan, he or she must analyze the most favorable offer. Today, this task is made easier by “marketplaces”, online platforms where you can compare the options of different types and institutions.
4) Think about the future now: if the installment plan lasts for months or years, you need to be clear about the fact that your next budget will be compromised for months or years to come. It is also important to assess the security of your main source of income, considering whether there is any significant risk that your income will fall in the coming months.
5) Watch out for triggersThe psychological aspect needs to be taken into account alongside basic knowledge and budget control. There are consumers who, despite planning, end up giving in to impulse purchases. In these cases, you need to learn to deal with the triggers, for example by avoiding taking out very high credit limits or anything that makes it easier to carry out the impulse.
6) Remembering dreamsWe all have bigger long-term plans. However, without proper control, present spending can make these achievements impossible.
7) Keep in mind at all times that credit is completely different from incomesooner or later, it will have to be paid.
