Credit cards have the following payment methods:
Interest-free payment in full (0.00% APR)
With this payment model, all your purchases in a month are charged to your account, in a single payment, at the beginning of the following month or in the period defined by the financial institution.
This payment method has one great advantage: everything you spend, you pay the next month without interest or fees. 0.00% APR. And your credit limit becomes automatically available once your payments have been charged to your account, so you can use it for new payments or purchases.
Fixed monthly Instalment payments
Under this payment method, you can choose a fixed amount you want to pay per month, for example €30, €50, etc. The amounts will be charged monthly to the current account you choose until you have finished paying your drawn balance (both the capital and interest). The big difference compared to other payment methods is that the debt can continue to increase if you keep using the card, but you still pay the same amount every month. However, if you don't use your available credit and carry on paying the same amount, your debt will decrease.
The chosen instalment will be applied with a minimum amount. Where the chosen fee is less than the minimum amount, the instalment to be paid will be the minimum amount established by the bank or financial institution.
Payment in instalments as a percentage of the debt
With this payment method, you choose the percentage of the balance on the card you want to pay each month. The instalments are charged every month until you have paid off the balance you have used, including repayment of principal and interest.
For example, you could pay only 10% of the balance drawn. Under this system, the instalments reduce as the outstanding balance decreases. Remember that if you keep on using your available credit, the repayment instalments will increase in proportion.
The chosen percentage will be applied with a minimum amount. Where the chosen percentage is less than the minimum amount, the instalment to be paid will be the minimum amount established by the bank or financial institution.
Payment in instalments over specific periods
Under this payment method, you choose a specific period to repay the money spent. The monthly instalments are calculated by dividing the amount of your purchases, plus interest, by the number of months into which you have decided to divide the payment.
It is very common to spread purchases over 3, 6 or 12 months, for example. As this is deferred payment, the shorter the period, the larger the instalments. And the longer the term, the smaller the instalments, but the more interest you pay.
Spreading one-off purchases
This is a payment method that is being used more and more in supermarkets, household appliance shops and large distribution channels. It also has a Financing Service, which you can use to pay for one or more purchases within a specific period of time, usually between 3 and 36 months, with a minimum amount (to be determined by each bank or financial institution). The idea is for customers to be able to pay one or several one-off purchases while maintaining the end of month payment system.