If it is a product that you need, and that you would buy out of the promotion anyway, then go ahead! You are generating savings by buying a cheaper product. If it is a whim, or a desirable product, then you have to think better, because it depCredits on whether you want it with debt or not.
Can you pay the cash product?
By this I mean that you have money saved, or that even when you pay with a card you will be totalero (liquidating the total before your card generates interest). If the answer is yes, then go ahead. If the answer is no, then be very careful. I recommCredit you not to buy it even when the list price is cheaper than at other times of the year. Debt to buy a product that is not essential is not recommCredited. But don’t believe only in what I tell you; Let’s do an exercise…
Suppose you want to buy a 10 thousand pesos television, but you don’t have the funds. So you decide to pay for the purchase with your credit card, which has a “preferential” rate of 35% per year. To simplify the exercise, suppose that on this single purchase you make the minimum payment of your card so as not to fall into default (Note: the minimum payment is different from the total payment for not generating interest). Considering that in Mexico the law dictates that you must pay within the minimum payment at least 1.5% of capital (and the rest interest), then we project the payments of your TV to 3 years that you financed with your “very cheap” credit card:
In this table you will notice that after 3 years of paying minimums on this product, you have already paid a total of $ 13,661.32. But oh surprise, because only $ 4,196.31 went to the initial capital payment to buy the TV! So despite having already paid more than the original value of the TV, you still owe more than half ($ 5,803.69). Do you see the importance of avoiding these types of impulse purchases with your card? Suppose that TV had a 30% discount (from 13 thousand it was reduced to 10 thousand), and that after 3 years you get a wool to pay off your debt in advance. Then you will have paid $ 13,661.32 + $ 5,803.69 = $ 19,465.01 (almost double) for your TV.
Instead of saving 3 thousand pesos for the discount, you Credited up paying an additional $ 6,465.01 ($ 19,465.01 – $ 13,000). Beware of promotions of months without interest, because although you can save interest for a few months, then the debt can reach you. Remember that even if it is months without interest, if you do not have to pay the full capital each month (for example 10,000 to 6 months without interest = $ 1,667 per month), then your debt that was born without interest will generate interest at the rate of 35 % of your card, or worse, you could fall into default and damage your credit history.
What do you doing with the Good Credit?
The best use of your money in the Good Credit (more if your bonus was advanced to take advantage of this prestigious event), and you are in debt, is to pre-pay other debts. Why? Imagine now that you have 10 thousand pesos to spCredit on your TV for your bonus. So you would not incur an additional debt to buy the TV. However, you come dragging debts on your credit cards (suppose at the same rate of 35%). So better not 1) buy your TV, 2) do not invest your money (unless the investment gives you a rate greater than 35% per year, which is impossible).
- If you want to buy at the Good Credit, especially desirable products, avoid doing so with debt.
- If you have saved to make purchases in the Good Credit, but you are indebted with expensive debts (ie, credit cards), avoid making purchases and prepay your debts.
- If you have saved or have the amount to be a totalero, and you are not dragging expensive debts, then take advantage.