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The CAT: How to select the best credit card?

The total national cost (CAT) in Mexico for a classic card it is sixty-seven percent, and in Colombia the rate is twenty-one percent, in the United States it does not exceed fifteen percent. The index is based on doubts about the financial conditions that Mexico is going through, there is the instability of the peso, in addition to the risk of a predetermined and very high person compared to other nations.

An example to understand the situation is that for every 2,500 MXN that a customer borrows when using their card and does not pay the bill on time, 1,680 MXN are charged and in the United States they charge approximately 150 MXN. So understanding the calculation is easy: the higher the percentage in CAT, the more expensive it is to have a card.

If you choose the right card you will get more for your money. It is important that you know that most of them charge you an annual commission. If you stayed with the first one that they offered you, it is likely that you are receiving benefits that you will never use. Compare and stay with the one that suits you best.

That is, it is the sum of interest, insurance and commissions charged by the card operator. So that with the payment due or delayed, the total annual cost is increased by the risk that the client cannot make the payment of the debits of the card.

El CAT es el Costo Anual Total. ¡Descubra más sobre lo que esto tiene que ver con su tarjeta de crédito!
The CAT is the Total Annual Cost. Find out more about what this has to do with your credit card! (Photo: Internet)

How to get a credit card with CAT!

Consequently, most credit cards have a due date for paying off debts. The first is used to mark the beginning and end of a period that is normally 30 days. The second, on the other hand, defines the day on which you must pay the debts made in the previous month. That is why it is important to mark the payment date to avoid additional taxes.

Do not forget that when you use the card, you are requesting a loan. So that each time your card is used, whoever is paying for the purchase and the financial institution, that is, the card operator, is lending you money, and it will be up to you to pay the amount of the loan. So that CAT It is the total of all costs and expenses generated by a card.

Factors that allow comparison between credit cards

Do you know how to make a comparison between cards? When looking for a credit card, the customer must pay attention to all the details so that the choice is not only for the company that offers the highest credit limit, but for the one that offers conditions that are adapted to reality. the client's.

In addition, they can be very expensive and you will not be able to maintain them. So that you can make the best decision, we will now present what you should consider when comparison between cards.

Availability of cash in the comparison between cards

This method is widely used in Mexico, where the client has the opportunity to make a cash withdrawal using the card. In order for this transaction to be considered a purchase and the next invoice will be charged to the customer and it is also important to remember that there are fees to make a withdrawal using your credit card.

Factores que permiten la comparación entre tarjetas de crédito
Factors that allow comparison between credit cards (Photo: Internet)

Cost - It is charged each time the customer withdraws money at an ATM, this amount is subsequently charged on the card bill. The rates vary between 3% and 9% of the amount withdrawn. In some countries, the rate does not exceed 1%.

Benefit - this service is offered by some credit card operators in Mexico. And the amount withdrawn can be paid in the following months. However, it is necessary for the client to be organized.

commissions

When making a comparison between cards, it is necessary to take into account that most card operators charge some type of commission. So, the more perks, the more cars the fees are charged. In Mexico, the most common are annuities and insurance against any type of fraud.

Annuity: You can find a card with this 400 MXN fee model for around 2000 MXN. It is important that the client investigate to find companies that offer this service in the market. So that the client is not surprised and knows how much he will have to pay for the service. Banco Bilbao Vizcaya Argentaria, and one of the institutions that allows its clients to postpone the annuity for a period of 3 months, helps the client to be able to settle their accounts.

Sure - It has a cost that varies between 50 and 1000 MXN plus Value Added Tax. The service is charged directly and monthly. The insurance is used to avoid the following situations:

  • theft or loss;
  • for unrecognized charges;
  • and life insurance.

To select the right one, you have to evaluate and analyze different criteria. They are essential for your decision to be a success.

So when choosing your card, pay attention to the availability of cash (costs and benefits), whether there are annual fees and insurance charges. do the comparison between cards and make the best decision.

The "locked-down generation": the economic effects of the pandemic on young people

For the International Labor Organization, young people are the ones who suffer the most from the economic difficulties caused by the coronavirus pandemic. For this reason, some experts already use the term “confined generation” to talk about the situation these young people live.

One in six young people has lost their income since the start of the pandemic. In addition, for those who had a job, the working day was reduced and, as a consequence, there was a drop in wages. This is a generation that will be marked by the difficulties that the virus imposes on society as a whole. The economic crisis resulting from the pandemic exacerbates the vulnerability that young people already faced when entering the labor market.

As a consequence, as a large part of the educational spaces had to paralyze their activities due to the pandemic, this can cause some young people to have delays in their studies, since they will not be able to attend the academic area. In this sense, the world labor organization shows that the health crisis caused by the coronavirus has a very big impact on young people, since it destroys jobs and education, in addition to nullifying the possibility of young people entering the labor market.

La "generación confinada": los efectos económicos de la pandemia en los jóvenes
The "locked-down generation": the economic effects of the pandemic on young people (Photo: Internet)

The current situation of the confined generation

Before the financial crisis caused by the coronavirus, the youth unemployment rate was 13%. In Latin America, the index is 17%, which shows how vulnerable this social group is. So a significant part of young people is suspicious and afraid of the future. This causes many of them to develop illnesses such as anxiety and depression.

In addition, many of the young people had low-paid formal jobs or were inserted in the informal labor market. Thus, 75% of economically active young people work in an area of the informal economy. So this working model does not give access to any social protection benefits that countries are offering during the period of financial adversity.

Given this scenario, the world labor organization suggests that countries apply public policies that have been implemented after times of economic difficulties. The institution says that due to the current circumstances, the State needs to act urgently with a focus on young people who are the most vulnerable in the midst of the crisis.

Thus, according to the World Labor Organization, it is up to countries to take measures to protect the economy and allow young people to have a place in the labor market.

World economy and the worst recession since World War II 

Lhe world economy may face the worst recession of history. With a drop of more than 5% eThis year, this rate is the highest since World War II. It will also be the first time since the 19th century that several countries will experience a drop in their per capita production.

Which in turn will put many people in a situation of misery. This situation was predicted by the World Bank due to the coronavirus pandemic and restrictive measures to contain the spread of the disease.

"Countries are experiencing a significant recession in the per capita income of the population, levels that are the highest since the late 19th century, despite all the unprecedented public policies to combat the pandemic."

This is the situation described in the World Economic Outlook report. In addition, this document presents a projection of a 3% drop in per capita income. Which will cause millions of families to be below the poverty line.

La economía mundial se contraerá 5.2 por ciento este año, la más profunda recesión desde la Segunda Guerra Mundial.
The world economy will contract 5.2 percent this year, the deepest recession since World War II. (Photo: Internet)

Understand what we can expect from the post-recession global economy!

The US economy is forecast to shrink by just over 6% this year, due to social distancing measures to reduce the ills of the pandemic. The estimate, which is worse for the eurozone countries.

It is speculation of a retraction of the 9% due to the large covid outbreaks that have affected countries such as Italy, France and England in the last year, which made various economic activities in the old continent unfeasible.

In Japan there is a somewhat more encouraging outlook than in Europe, since economists expect a drop in 6%. On the other hand, the Chinese economy is going against other countries, the forecast is that the Asian giant will be able to recover 1% of the Gross Domestic Product. India is expected to drop a bit more than 3%.

As for the Russian and Brazilian economies, the prospects are for a decline of 6% and 8%, respectively. For other Latin American economies such as Mexico and Argentina, the estimate is for a fall of 7% for both.

Covid-19 and the different scenarios of the economic crisis

In this scenario, emerging countries and developing economies feel the effect of the crisis more intensely. Where the suspension of classes and the difficulty that the population has to access primary health services.

Experts are unanimous in stating that these factors have caused problems in the development of the population. Given the enormous scenario of uncertainties that the world economy has been suffering, the world bank has been speculating on various scenarios for the economy in the coming years.

The bearish simulation takes into account a fall in the world Gross Domestic Product of 8%. Although the bullish scenario estimates a reduction of 4%, this index being much higher than one of the worst economic crises in recent years, the recession 2009 overall.

See also:

Organize your finances through a personal budget

Ways to build credit without having a card

Credit cards are a great tool for build credit. They are easy to use, offer flexibility, and sometimes even reward you for using them. Most of them also directly affect your credit score and are used by many people to start building their credit profile.

But what if you don't want a credit card or are having trouble qualifying? Don't worry. There are many other ways to build a strong credit history. Here are nine options for building credit without a credit card.

Construir el crédito (Foto: Pixabay)
Build credit (Photo: Pixabay)

1. Authorized user status
Authorized user status is a great way to start build Credit, as long as you and the primary cardholder are on the same page. As an authorized user, you can use the primary cardholder's credit card and take advantage of their credit card activity. Even if you never use the card, card activity can be used to positively affect your credit. You will need to check with the credit card company that they report card activity for authorized users. Otherwise, you will be wasting your time.

2. Loans to build credit
Credit builder loans aren't heavily advertised, but they are a great way to build credit without a credit card. Smaller institutions, such as credit unions, often offer credit builder loans specifically to help borrowers build credit]3. Booklet or CD loans.

4. Peer-to-peer lending
Peer-to-peer lending is done by an individual investor or group of investors instead of traditional financial institutions, with the accrued interest going back to the investors. As superficial as it may sound, P2P lending is completely legitimate and can be set up through a reputable P2P service like LendingClub, unlike borrowing money from your cousin.

5. Federal Student Loans
If you are a student looking build credit, you can consider a federal student loan. Most federal student loans do not require any credit history. Private options, on the other hand, often require good credit scores or a cosigner. Don't take on student debt just to build your credit, but if you're already considering a student loan, they might be a good way to start. Federal student loans show up on your credit report and, if paid on time, can help you build a positive payment history.

6. Personal loans
Some lenders offer unsecured personal loans to individuals with bad or no credit. These involve borrowing a fixed amount of money and making fixed payments each month. If you don't have an established credit history, you may be charged a higher interest rate. You may be able to get a cosigner to help your approval odds for a lower rate

Read More: See ways to maintain a good credit score

7. Auto Loans
Most traditional lenders report all your payments to the credit bureaus. And because auto loans are secured by the vehicle, they are less risky for the lender than unsecured loans. That means you could qualify for them even if your credit isn't stellar, although that could come with the expense of higher interest. However, if you make your loan payments on time, it could have a positive impact on your score and refinance later.

8. Mortgages
Getting a mortgage with no credit history is difficult but not impossible. If your goal is just to start building credit, a mortgage may not be the best place to start. But if you're ready for homeownership and the chance to build your credit with a mortgage, you have options. First-time homebuyers may want to consider the FHA mortgage, for example, which is available to people with a thin credit file. Smaller lenders, like credit unions, tend to be more flexible and can help you qualify for a mortgage as well.

9. Rental
Most credit reports do not contain entries regarding rent payments simply because landlords do not bother to report such activity. But the credit bureaus will add timely rent payments to your credit report if they are presented with that information. If you are evaluating a rental or currently renting, ask the landlord if he will report your rental payments. You can also use the online rent payment requests to ensure that this information is

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