Tips for using your credit card properly and avoiding default

Improper use of credit cards is the main factor among people experiencing financial difficulties. According to Bravo, a company that helps settle overdue debts, 95 percent of those seeking financial recovery on its platform do so after losing control of these cards.

In total, the company reports that more than 56,000 Colombians in arrears access its programs each month, accumulating debts averaging 35 million pesos, with at least four active obligations.

Most of these users have a monthly income of approximately 2.6 million pesos, typically have one or two dependents, are single, and are between 31 and 40 years old.

According to the company, a lack of understanding of how variables such as interest and payment accrual work has led thousands of Colombians into debt that is difficult to reverse.

"The most common cases begin when people lose the ability to cover even the minimum monthly payment," says Camilo Quiñones, country manager for Bravo Colombia.

Additionally, the company indicates that other warning signs include the need to defer balances to more installments and the complete use of available credit, leaving no room for any eventuality.

Currently, in Colombia, it is estimated that more than 37 million people have financial products, but only 14 million actively access credit. For Bravo, the key lies in understanding that the problem isn't the credit card itself, but rather the lack of knowledge about its responsible use.

"This situation reminds us of the urgency of strengthening financial education in the country. Only then will more people be able to avoid falling into cycles of debt and build a healthy relationship with money," Quiñones concluded.

Datacrédito offers a series of recommendations for smart credit card use.

They point out that one of the most important factors in building a good score is paying on time. They also say that paying only the minimum can help avoid a negative report for late payments, but it's not ideal if you're looking for a better score.

"This is because accrued interest can increase your debt and affect your debt level, which impacts your credit score. It's best to try to pay more than the minimum whenever possible to reduce your balance and demonstrate responsible financial management," they say.

Additionally, they indicate that you should not try to spend more than 30 percent of your credit limit and that you should be informed about interest rates, as well as the cut-off and payment dates.

"A high rate can make your debt more expensive over time. Furthermore, rates can be fixed (they don't change) or variable (they go up or down). Evaluate which one suits you best," they say.