So you can avoid paying your credit card membership

Do you have one or more Credit cards? Do you want to get a card, but are you worried about the payment of the membership? If you have or are thinking of acquiring this product, you should bear in mind that you must pay the membership every year, which nobody likes to pay. Do you know how to avoid this payment?

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It is difficult to escape having a credit card, with so many insistent calls to purchase the plastic and benefits they offer. If you agree, you must take into account the fees and take a good look at the fine print, as well as how much the membership will cost you and how to avoid it.

Next, we give you the details about this financial product and how you can be exempt from the annual membership fee.

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WHAT IS A CREDIT CARD?

A credit card is a revolving loan given by a financial institution. It gives you a line of credit that you can use in parts and continue using while you pay. “While you are paying, it is recomposed in your favor,” explains Bárbara Castro, a specialist in financial law.

When you take out a credit card, it is important to know which product suits your needs, what you need it for and the associated costs, such as maintenance and membership.

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WHAT IS A MEMBERSHIP?

The membership annual is a commission charged by the banks for the service of managing the exclusive benefits that are provided according to the type of card such as:

  • Access to the world platform of Visa and MasterCard.
  • Payment of consumption in several countries.
  • Insurance packages for travelers.
  • Issuance of cards worldwide.
  • Administration of discount programs.
  • Administration of reward programs.
  • Points or miles programs.
Banks offer benefits for the use of the card (Photo: iStock)

HOW CAN I DO NOT TO PAY MEMBERSHIP FROM MY CREDIT CARD?

Some banks have a minimum consumption depending on the type of credit card (classic, gold, platinum, Signature either infinite), which goes according to the level of the card, for the exoneration of membership, commented the personal finance specialist, Walter Eyzaguirre, in an interview with Andina news agency.

Some banks exempt customers who use their credit card every month or meet the average total annual consumption stipulated for the specific type of card from membership fees. The number of products they have with the entity is taken into consideration, such as the CTS payment, savings account, Mutual Funds, insurance, etc.

ARE THERE CARDS FOR WHICH MEMBERSHIP IS NOT CHARGED?

Yes. The Superintendence of Banking, Insurance and AFPs (SBS) ordered that all financial entities have a credit card without membership. If you are not interested in benefits, such as miles or points, among others, it is a good option.

WHAT SHOULD BE TAKEN INTO ACCOUNT WHEN TAKING OUT A CREDIT CARD?

Indecopi indicates that consumers or clients of the financial system must verify the documentation well before signing it, read and review all the conditions, among other things such as:

  • Put interest in the rates, in the costs and charges that will be applied to the contracted credit card.
  • Check whether or not the collection of the commission for membership or renewal is included.
  • Check the membership waiver policies.
  • Request that any offer be made in writing, in a clear, explicit and understandable manner.
  • Keep in mind the periodicity of the charge for membership or renewal (how often the charge will be made)
  • If you do not use the credit card, you must cancel the account, because “it is not true that if you do not use it, you do not have to pay the membership fee.”

HOW TO COMPARE THE CREDIT CARDS OF ONE FINANCIAL INSTITUTION WITH OTHERS?

You should take into account the following and compare between one bank and another:

  • It is necessary to know the effective annual cost rate (TCEA) that includes the additional costs to the ordinary interest rate. While the TCEA makes a number of assumptions, it is a first indicator of comparison to take the financial product.
  • Analyze and compare the cost of the membership commission for the cards and ask about the policies to be exempt from that charge.
  • Analyze the services and benefits that are provided by the membership fee and determine if they particularly generate value for me, such as the loyalty programs offered by the cards (miles, points, etc.)
  • The promotions and discounts they offer for consumption. For example, installments without interest or discounts in establishments such as restaurants.
  • Analyze the type of insurance coverage offered by credit cards.
  • Check if the application has the option to block cash disposition and foreign purchases.

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