Monthly Archive: October 2019

Credit or debit: Why is it important to choose wisely?

Credit or debit? Who pays your card purchases is tired of hearing this question. While making the choice seems simple, deciding between the two forms of payment involves some issues, which should be carefully considered to avoid compromising the budget.

To help you, we have prepared this content that explains the difference between credit and debit, pointing out in which situations each option is most advantageous and why it is important to make the choice with awareness. Good reading


What is the difference between credit or debit?

What is the difference between credit or debit?

You may already be tired of knowing, but it costs nothing to remember the mechanism of operation of credit and debit cards.

On debit, the customer makes the payment as if they were making a direct bank transfer to the merchant. The money goes out of your account immediately and goes to the shopkeeper’s account. Debit cards do not charge fees for their use. On the other hand, they do not allow the accumulation of miles or the installation of purchases.

In credit, purchases can be made up to a pre-set limit by the card-issuing bank and are accrued on a monthly invoice. Typically, an annuity is charged and there are loyalty programs that allow you to exchange your accumulated points for goods and services.


When to use credit?


If used responsibly, the credit card is a good ally for those who want to plan their monthly finances. By concentrating expenses on it, it’s easier to pay for everything that was spent over the month on the invoice due date.

Credit is also a good option when it comes to installments of larger amounts. In addition, the accumulated points can be interesting and result in good exchanges.

However, this payment option quickly becomes a trap if used without control. Therefore, spending must be kept in line with expected income in the coming months and not based on the bank’s limit – which is often greater than the consumer’s ability to pay.

Credit card interest accrues on overdue or unpaid invoices. They are among the highest in the market, with rates of around 274% per year.


When to use debt?

When to use debt?

Those who need to keep their spending under control should always opt for the debit card, as it allows purchases only according to the available cash. This way, it is as if payments are being made in cash.

Debt also provides security for those who don’t want to carry cash in their wallets or purse. In case of loss or theft, simply lock the card to avoid injury. Finally, debit cards are more widely accepted in commerce and with some conversation, you can negotiate a discount on payments made through certain merchants.

Whether it’s credit or debit card, it’s important that any purchase is made with awareness, right? In both options the money will come out of your pocket. Therefore, every penny must be valued and spent according to careful financial planning.

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Letter of Credit: We got the top 4 questions

The goal of everyone entering a consortium is to be contemplated and receiving the long-awaited letter of credit. She is the one who allows the acquisition of the good or service by the consortium member.

Because it is so important, this subject still raises many questions. Thus, we listed 4 most common questions about the letter of credit, such as issues involving its receipt, use and correction of values. Keep up!


1. What is a letter of credit?

credit loan

The letter of credit is the document that every consortium member receives when contemplated. With it you can buy a good or hire a service according to the stipulated value.

To enjoy the letter of credit, you need to be aware that it is an instrument with an exclusive purpose. This means that the recipient can only use it to purchase products that fall into the category determined by the consortium.

In summary, there are three main categories of consortia: real estate, which allows the purchase of any type of property, vehicles, which entitles the purchase of cars of different models, and services, which allows the contraction of travel. , makeovers or aesthetic treatments, for example.


2. How to get a letter of credit?

credit loan

The safest way to get a letter of credit is by hiring a consortium. With planning and choosing a reliable company, the chances of problems are slim.

Current legislation does not prevent contemplated cards from being purchased. However, this is a bureaucratic process that involves several legal obligations. Also, there is always a risk of falling into scams. Therefore, the ideal is to avoid this procedure.


3. How is the value of the letter of credit updated?

3. How is the value of the <a href=letter of credit updated?” />

So the letter of credit does not lose purchasing power throughout the consortium, its value is updated periodically. This correction is made following the rules established in the contract, but it is common for it to follow market-established indexes, such as the National Construction Cost Index (INCC) or the General Market Price Index (IGP-M).

The update of the letter of credit also makes the value of the corrected installments, so that the group can honor its commitments and all members can buy the good or contract the desired service.


4. How to accelerate contemplation?

credit loan

The most common way to be contemplated in a consortium is through raffles made at assemblies. For those who want to accelerate this process, the alternative is bidding. The bid is an offer of advance of the installments made by the consortium. There are three main ways to bid:

  • free throw, where any amount may be offered and the best bid wins;

  • fixed bid, in which it is necessary to give a value according to the established in the contract;

  • embedded bid, where a part of the letter of credit is bid.

Bidding is a great strategy for those in a little hurry. However, you need to carefully check the rules imposed by the administrator. These standards may vary from company to company.

Understanding how the letter of credit works and can be used makes it easy to understand why a consortium is a great option to realize your dreams!

Still any questions? Thinking about hiring a consortium? Contact Rode Brothers, we are ready to serve you!