Managing your credit card is fundamental. To make the most of this financial product, it is necessary to know how it works and certain concepts that are essential to its operation.

A credit card is a line of credit that the financial institution assigns to its customers. It is an unsecured credit and cardholders can use it to make any type of payment, as long as it does not exceed the available credit limit.

At the end of the period they must make the minimum payment indicated on their account statement, the payment to avoid generating interest or the total amount owed. When you do not make the payment of the total amount you used, the institution charges interest.

What happens if I overpay my credit card?

Now, what happens if I not only pay the total amount of money I used, but I pay more than my total debt, what happens to my money? If you have been there you have surely wondered, don’t worry, here we explain it to you.

When a cardholder makes a payment greater than the amount owed, it will automatically appear as a credit balance. It is recommended that you use this credit balance in the following period.

If you wish to withdraw the money, you should first consult with the banking institution with which you have your credit card, so that you know if this implies a commission. There are even banks with which you can initiate a procedure for the refund, so the best recommendation is to contact them to find out about it.

To avoid this type of mishaps, there are simple tips you can follow to manage your credit card.

Follow these tips to maintain a good credit history and use your card in the best possible way.

Tips for managing your credit card

Sometimes we can make some mistakes with the management of our credit card, most of them can be avoided, so we recommend you to follow these tips:

Check your account statement

To avoid paying more on your credit card, paying less than the minimum or making a mistake regarding the amounts, the best thing you can do is to always check your account statement.

You should pay attention to the following items:

Payment Deadline

As its name indicates, it is the day of the month that you have as a limit to make your payment, otherwise commissions and interests may be applied.

Minimum payment

This refers to the amount you must pay in order not to fall into arrears or arrears. You are up to date with your credit, however your debt generates interest.

Non-interest bearing payment

This is the amount you must pay to avoid being charged interest.

Current balance

To avoid overpaying on your credit card pay attention to this amount, it may say current balance, total debt or a similar term, it states how much you owe in total. If you want to pay your debt in full, limit yourself to this figure to avoid any confusion.

Pay more than the minimum

If you pay more than the minimum amount indicated on your statement, you reduce the amount and term of your debt and pay less interest.

Keep up with your payments

It is very important to pay on time, when you fall into arrears your debt increases, making it more difficult to cover it every day, and it also has repercussions on your credit history.

Finally, remember that having and using a credit card is a financial responsibility, be aware of its use and do not use it as an extra income.