In the world of loans, there are financial traps that deserve special attention. One of the most commonly used tricks is hiding the true cost of financing. By extending the term, the total cost skyrockets, reaching rates over 100 percent annually. Credit campaigns also exploit the fear of missing opportunities.
The use of ambiguous terms, such as advertising attractive rates but omitting the Total Annual Cost (TAC), which integrates fees, insurance, and other charges, is a common strategy. The competition to attract customers takes place in an environment where financial education remains poor, facilitating misinformation and manipulation, especially in credit. This is compounded by the influence of social media, where misleading information proliferates.
Some content creators spread confusing information, while others with thousands of followers promote products without revealing that they are getting paid for it. As a result, people enter into commitments without fully understanding them. Phrases like “flexible amortization” or “prepayment without penalty” can hide additional costs. Bundling loans with insurance, investments, or other products makes it harder to understand the commitment.
Before acquiring a loan, it is advisable to assess whether it is necessary or if there are more convenient alternatives. Digital applications have expanded the range of financial products, adding to the traditional options of banks and institutions. Reading the contracts carefully allows one to identify penalty clauses, changes in rates, and automatic renewals. Periodically reviewing the credit status helps detect anomalies.
A 5 percent monthly rate, which seems accessible, can translate into a cost over 80 percent annually. Another common tactic is promoting “low weekly payments,” which gives the impression of a manageable commitment. Behind this issue lie strategies to induce hasty decisions.
