Financial experts recommend that if you can’t pay the full balance, you should at least cover more than the minimum payment (ideally an additional 20 to 30 percent) and stop using the credit card.
It is It is a modern payment instrument that plays a crucial role in a country’s e-commerce.by facilitating commercial transactions. But in addition to using it to make purchases, The owner is responsible for making payments as agreed in the contract and ensuring its proper use.
To maintain effective control of the transactions carried out It is important to remember that it should not be used as an emergency fund, since that is what savings are for.overstep her authority.
In addition, it is recommended Pay the full balance instead of just the minimum payment and include these payments in your monthly budget to maintain proper financial management and avoid problems of loss of control.
How to negotiate a debt
Although Banks offer promotions to encourage the use of credit cardsit is essential that cardholders Avoid exceeding your monthly income. The inability to cover payments can lead them to face a financial crisis.
In the law in force in Guatemalaif a Guatemalan does not have sufficient liquidity to cover his debt from using a credit card, You have the option to request a debt restructuring. In these cases, The presence of a guarantor is not required and no interest should be charged on the restructured debt.
In addition, The monthly fee to be paid must not exceed 20% of the debtor’s monthly income. This measure is designed to provide financial relief to those facing problems in meeting their credit obligations.
Other The recommendation of the Superintendency of Banks (SIB) is to consolidate debtswhich should offer a favorable interest rate and evaluate the convenience of canceling unused cards.
Credit Card Law in Guatemala 2024
The decree indicated that the law would come into force six months after its publication in the official journal. The decree was published on March 1, 2024, so The law will enter into force on September 1, except for articles 35, 36, 37, 56, 58, 59, 60, 62 and 63, which entered into force on the same day of their publication.
On March 1, decree 2-2024 was published in the official journal, indicating that It will come into full force six months later, that is, on September 1st.except for articles 35, 36, 37, 56, 58, 59, 60, 62 and 63, which are in force from the day of said publication.
The new regulations propose, among the most important modifications:
- Article 11. In the event of a payment agreement being entered into, the interest rate must be calculated on the initial balance and may not be set on interest, late payment or other surcharges.
- Article 17. The banking institution is prohibited from using the cardholder’s monetary funds or savings to allocate payments for debts resulting from the use of credit cards.
- Article 21. Credit card replacement may only incur a fee in the event of loss; it does not apply in the event of theft.
- Articles 41 and 42. Harassment, bullying and the use of abusive practices in debt collection are prohibited.
- Article 50. The crimes of cloning and theft of card data are included in the Guatemalan Penal Code.
How to access credit history
The credit report is the applicant’s cover letter when requesting a loan from a banking institution.The report provides details such as debt by institution, credit number, credit type, type of guarantee, principal debt balance, interest and date of last payment made.
On the other hand, The credit record or history report is the applicant’s letter of introduction when requesting a loan from a banking institution. The report provides Details such as debt by institution, number and type of credit, guarantee (fiduciary, collateral or mortgage), principal debt balance, interest and date of the last payment made.
In Guatemala, The SIB is the institution responsible for providing the credit record. To consult your history, anyone can perform the following operation:
- Go to the Superintendency of Banks website. Find the “Customer Service” section and select “Credit History.”
- If you already have a user, log in. Otherwise, you should create one. This procedure can be done at a bank branch or in your virtual banking. To do it online, consider the following steps:
- If you use the services of several banks, this operation only needs to be done with one of them.
- Log in to your online banking and look for “other procedures” or “other operations”. An option such as “Request user for the SIB portal” or “SIB procedures, user support request” should appear.
- If the data is updated and registered correctly, the bank’s platform will allow you to “Create or send the Request”. You will receive an email from the SIB with your username and password.
- Once you have logged into the Superintendency of Banks portal, click on “credit history”.
- Then “View credit history”, accept terms and conditions.
- Finally, the system will provide you with a .pdf file with details of your current bank debts. It will even detail how you have been classified as a customer over the past five years.
The category assigned to each account holder changes monthly, that is, if during a month of the year you did not pay your debt or paid only the minimum installment, this will also be reflected in your history.
Concepts that every credit card user should know
It is important to use your credit card appropriately to avoid falling into an overdraft situation.
The SIB comments that “it is necessary to investigate how the financial system works and the products and services it offers.” In addition, understanding and considering these concepts can significantly benefit your financial life:
- Cut-off date: Day on which the issuer finishes recording the transactions carried out in a given period (generally during one month).
- Cash payment: Amount that must be paid no later than the payment due date shown on the account statement.
- Credit limit: Maximum amount that the issuer authorizes the cardholder to use.
- Payment deadline: Maximum date established by the issuer for making the payment.
- Minimum payment: Amount defined by the issuer to keep the card active. If only the minimum is paid, interest and other charges are incurred.
- Balance: Amount owed as of the cut-off date.
It’s important to remember the difference between a credit card and a debit card. The card of Credit works like a loan that must generally be repaid within 30 to 45 daysdepending on the conditions of the issuing bank. On the other hand, The debit card uses funds available in a checking or savings account.
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