0% installment promo from credit cards is often tempting. Because, we can buy goods using the installment scheme without being charged interest. Expenses that were originally large can be broken down into smaller nominal, according to the length of the installment period.
As a result, the payment feels much lighter and the remaining money can be used for other purposes. Without the need to disturb the savings fund, just swipe, the items needed can still be purchased. Anyone so difficult not to be tempted by this one credit card promo.
Eits, but don’t be happy yet. Because, without knowing the rules of playing 0% credit card installments, it is not impossible that financial conditions will actually worsen.
Before hastily tempted to offer a 0% installment for a credit card, first understand a few important things below.
Basically, the 0% installment is an installment program for credit card holders, with no interest being included or is often referred to as the 0% interest program. That is, during the installment period, bills that need to be paid only in the form of principal bills without adding any interest expense at all.
For example, if you buy a smartphone for USD 5 million with a 0% installment program and a tenor of installments for 5 months, then every month the bill to pay is USD 1 million.
As we know, transactions using a credit card can only be done if the credit card limit is still adequate, including when using the 0% installment promo. If your remaining credit card limit is USD 5 million, of course you cannot buy items worth USD 7 million.
Therefore, credit card limits will automatically be deducted from the nominal transaction carried out.
So, if you buy a gadget for $5 million using a $6 million credit card, the remaining limit that can be used is only $1 million. Credit card limits will increase in line with installment payment each month.
Like other credit card programs, the 0% installment offer also has different terms and conditions, depending on the policy of the credit card issuing bank. If you are not observant about this, you might even end up losing.
0% installment program requirements usually include the validity of the program, merchants who work together, minimum and maximum transaction value, installment period, and product categories that can be purchased using this program.
In addition, if you are making a transaction for the first time using the 0% installment program, don’t forget to activate the 0% installment program by contacting the call center of the credit card issuing bank.
Typically, this activation process takes time from 5 to 14 working days, until spending is processed into the 0% installment service. If you forget to activate this service, do not be surprised when receiving credit card bills, because there are still interest fees charged.
Interest free, does not mean free of charge. In the 0% installment service, usually there are administrative costs and taxes borne by credit card holders. The amount starts from 3-4 percent of the total transactions, depending on the credit card issuing bank or related merchant .
Even so, there are merchants who are willing to cover both types of costs, so you don’t need to pay any additional fees.
Also make sure the transaction does not exceed the specified card limit. Because if you don’t, you will be charged an over limit fee, ranging from $40-150 thousand.
In addition, some banks will also charge a penalty fee, if you pay off before maturity. For example, the Lite Lending credit card charges an accelerated repayment penalty fee of $100,000 per transaction.
Already applied for a 0% installment program, but are late paying the bills? It’s a lie. Because, if you are late paying credit card bills, you will be charged late fees or penalties that add to the burden of the bill.
Credit card issuers usually charge a late fee of around 3 percent of the total bill or equal to the maximum value set by the credit card issuer. In other words, the benefits of 0% installments can only be felt if you are disciplined in paying bills per month.
0% installments can indeed make it easier for you to be able to immediately have the desired item. However, don’t forget that debt is still debt. You still have to allocate a special budget for regular installment payments.
In other words, buying goods with a 0% installment service will still add to your expenses. Therefore, there is no need to buy goods just because they are tempted by the 0% installment service promo. Do not let, the purpose of frugality instead ends with a large expenditure for goods that are not needed.
In addition, if the goods needed can still be paid in full or in cash , then pay up directly in full so there is no need to bear the burden of debt. Moreover, not a few merchants who offer special prices or prices for purchases with cash payment methods. So, even if you have to spend large amounts of money at one time, the costs can be calculated more economical.