Post by nurnobisorker14 on Oct 30, 2024 3:33:52 GMT -5
The installment card is a novelty on the Russian banking services market. The product is created for people who want to control their expenses, it gives the opportunity to repay the debt with fixed monthly payments. This tool provides the opportunity to borrow money on favorable terms, without interest. So, today you will learn how the installment card works, how to get it, how to use it and a lot of other very useful information.
Contents hide
1) How does the installment card work?
2) Differences from credit cards
3) How to use the installment card profitably
4) What to consider when applying for an installment card
5) Pros and cons
6) How to get an installment card
7) Conclusion
How does the installment card work?
An installment card is a product, the essence of which is that there is no payment for its use. This is confirmed by the Central Bank website, where this information is presented. If a financial institution provides other conditions or sets interest for purchasing goods in installments, the client has every right to file a complaint.
A wary client may immediately think that there is a catch somewhere, but he is wrong. In the case of proven financial organizations, everything is transparent. It is important to understand that the banks' benefit is not to make a profit from customers, but from stores.
In the case when the owner of the "plastic" makes a payment to a partner, the trading house charges the financial organization a certain percentage of the bulk email campaigns completed transaction. It turns out that everyone gets certain advantages:
shops get customers for a small percentage;
Banks take commissions from stores;
Customers have the opportunity to purchase goods immediately and pay later in certain installments.
However, it is important to understand that such a scheme involves the introduction of some restrictions on the possibilities of installment cards. For example, making purchases is only possible in those stores that have entered into partnership agreements with certain banks. Fortunately, in today's realities, financial institutions are interested in having as many trading houses as possible connected to their offer. At the same time, all points of sale are interested in cooperation, from small ones (pharmacies, gas stations, etc.) to large ones (furniture stores, jewelry stores, etc.). Some banking institutions allow the possibility of purchasing from non-partners, but in this case a commission is provided.
Each partner works under certain conditions, this concerns, for example, the installment period. Depending on the store, the buyer may be offered the following refund periods:
1 month;
3 months;
6 months;
9 months;
12 months.
It is permissible to purchase goods both by visiting a retail outlet in person and via the Internet. Payments must be made every month in the same amount.
Let's look at an example. A buyer has decided to buy a washing machine for 60 thousand rubles. The store provides the opportunity to use an installment card for a period of 6 months. The client pays for the purchase, after which he pays 10 thousand rubles monthly for six months.
To pay off the payment, simply top up the installment card with the required amount. This can be done in various ways:
using a mobile application;
through a bank branch;
via ATMs.
Early repayment of the installment plan is permitted without additional fees.
In case of late payment, various sanctions are provided, which may differ in each bank. For example, some provide for the accrual of additional interest, while others will charge the buyer a penalty, etc.
It is important to understand that a client who has missed payments may have difficulty obtaining a loan in the future. All late payments are reflected in the credit history.
Differences from credit cards
According to the law, a credit card, as well as an installment card, are products that provide an overdraft limit (an overdraft is essentially the same as a loan).
For this reason, we can conclude that the principles of operation of credit cards (especially products with a long period of no interest on the debt) and installment cards are similar. So, each of the options has a limit of funds that can be used to make purchases. After they are spent, the buyer will need to make monthly payments, getting rid of the debt.
In case of active and conscientious use of any of the cards, the banking institution may increase the limit. In case of non-repayment of the debt, certain sanctions will be applied to the client. The installment plan can be converted into a regular loan, providing for a certain percentage of overpayments, this can be either 10% or 15% or more (each organization provides its own individual conditions, which should be read). In the event that the client was unable to meet the grace period, he must also repay the debt to the bank. It is important to understand that the interest rate can be quite high, for example, 20-30% per annum.
The installment card provides the opportunity to make purchases only in those retail outlets that are partners of the bank. K creditka allows you to make payments anywhere.
The installment card does not provide the ability to withdraw cash. A credit card, on the contrary, allows you to do this, but such transactions involve a commission.
Installment cards are free of charge - the client is not required to make payments. Credit cards may require an annual service fee. For example, the standard package requires a service fee of 1,000 rubles/year, and the premium - 15 thousand rubles/year. At the same time, funds are often written off the next day after the client activates the card. This fact becomes a rather unpleasant surprise for many.
Try paying in installments
First payment only after 30 days
Find out the limit
How to use an installment card profitably
Obviously, the main advantage of using an installment card is that the buyer can purchase the goods at any time, pay for them later and not overpay. At the same time, most financial institutions limit themselves to this. Only a small number of banks implement mechanisms in their systems that allow increasing the profitability of having an installment card.
For example, financial institutions may offer the opportunity to sign up for subscriptions that allow you to extend payment terms, increase limits, etc. It is important to always consider the additional features of the product to get even more benefit from its use. However, always remember to carefully study the terms of the offer.
What to consider when applying for an installment card
Having decided to purchase an installment card, it is worth knowing several important points that need to be taken into account when applying for it.
It is not possible to get a 12-month installment plan everywhere, so it is important to familiarize yourself with the rules of both the store and the bank. There is a possibility that the necessary product can be purchased in installments for no more than 4 months, and sometimes even less. Such restrictions may not please every customer.
The card allows payment only in certain places - stores that are partners of the bank. It is important to familiarize yourself with the list of retail outlets, perhaps most of them do not suit you. Compare the cost of the desired product in other stores, perhaps the desired product costs significantly less there, even without an installment plan.
There are situations when a customer is not given the opportunity to purchase a product that is subject to a discount. In such a case, using an installment card may be a worse decision than purchasing the product that is subject to the promotion.
Experienced economists have concluded that if you provide the opportunity to make purchases at one time and pay at another, the average customer check increases significantly (2-3 times). This means that the risk of making unnecessary, thoughtless purchases increases significantly. You need to use the product wisely, rationally assessing your needs.
Make timely payments. In case of failure to fulfill obligations, the bank has the right to charge a fine and send information about the delay to the credit bureau. Thus, the data will be reflected in the credit history, which means that in the future the client may experience difficulties when trying to take out a loan. Also, in case of failure to repay the debt within a certain period of time, the bank will charge interest on the remaining debt.
An installment card is a convenient and profitable financial instrument, but it is important to use it wisely.
Pros and cons
Installment cards are a reliable and profitable financial instrument, but they have both their pros and cons. So, here are the advantages of installment cards:
Payments are made in parts and over a long period of time. The product provides for monthly payments for a period of 1 to 12 months or more.
Fast and easy to obtain. Obtaining a card is a simple process that only requires a passport and a certificate that the client is officially employed.
The application for the product can be made online. Thus, the client only needs to use the Internet, provide his personal data and if the documents and credit history are in order, approval can be expected.
Completely free service. Some financial institutions provide additional programs, such as cashback (return of % of the funds spent) in case of purchasing goods of a certain category. More detailed information can be found on the website of a particular bank.
There is no doubt that installment cards are liked by many customers due to their undeniable advantages, but this tool also has some disadvantages, among which the following stand out:
The main disadvantage is that it is less versatile than credit cards. Purchases using this product can only be made in the bank's partner stores.
Also, the installment card does not provide the ability to make transfers or withdraw cash. In this regard, credit cards are a more flexible instrument.
In case of late payment, the buyer's credit history may be seriously damaged, which may result in a refusal when applying for a loan in the future.
Contents hide
1) How does the installment card work?
2) Differences from credit cards
3) How to use the installment card profitably
4) What to consider when applying for an installment card
5) Pros and cons
6) How to get an installment card
7) Conclusion
How does the installment card work?
An installment card is a product, the essence of which is that there is no payment for its use. This is confirmed by the Central Bank website, where this information is presented. If a financial institution provides other conditions or sets interest for purchasing goods in installments, the client has every right to file a complaint.
A wary client may immediately think that there is a catch somewhere, but he is wrong. In the case of proven financial organizations, everything is transparent. It is important to understand that the banks' benefit is not to make a profit from customers, but from stores.
In the case when the owner of the "plastic" makes a payment to a partner, the trading house charges the financial organization a certain percentage of the bulk email campaigns completed transaction. It turns out that everyone gets certain advantages:
shops get customers for a small percentage;
Banks take commissions from stores;
Customers have the opportunity to purchase goods immediately and pay later in certain installments.
However, it is important to understand that such a scheme involves the introduction of some restrictions on the possibilities of installment cards. For example, making purchases is only possible in those stores that have entered into partnership agreements with certain banks. Fortunately, in today's realities, financial institutions are interested in having as many trading houses as possible connected to their offer. At the same time, all points of sale are interested in cooperation, from small ones (pharmacies, gas stations, etc.) to large ones (furniture stores, jewelry stores, etc.). Some banking institutions allow the possibility of purchasing from non-partners, but in this case a commission is provided.
Each partner works under certain conditions, this concerns, for example, the installment period. Depending on the store, the buyer may be offered the following refund periods:
1 month;
3 months;
6 months;
9 months;
12 months.
It is permissible to purchase goods both by visiting a retail outlet in person and via the Internet. Payments must be made every month in the same amount.
Let's look at an example. A buyer has decided to buy a washing machine for 60 thousand rubles. The store provides the opportunity to use an installment card for a period of 6 months. The client pays for the purchase, after which he pays 10 thousand rubles monthly for six months.
To pay off the payment, simply top up the installment card with the required amount. This can be done in various ways:
using a mobile application;
through a bank branch;
via ATMs.
Early repayment of the installment plan is permitted without additional fees.
In case of late payment, various sanctions are provided, which may differ in each bank. For example, some provide for the accrual of additional interest, while others will charge the buyer a penalty, etc.
It is important to understand that a client who has missed payments may have difficulty obtaining a loan in the future. All late payments are reflected in the credit history.
Differences from credit cards
According to the law, a credit card, as well as an installment card, are products that provide an overdraft limit (an overdraft is essentially the same as a loan).
For this reason, we can conclude that the principles of operation of credit cards (especially products with a long period of no interest on the debt) and installment cards are similar. So, each of the options has a limit of funds that can be used to make purchases. After they are spent, the buyer will need to make monthly payments, getting rid of the debt.
In case of active and conscientious use of any of the cards, the banking institution may increase the limit. In case of non-repayment of the debt, certain sanctions will be applied to the client. The installment plan can be converted into a regular loan, providing for a certain percentage of overpayments, this can be either 10% or 15% or more (each organization provides its own individual conditions, which should be read). In the event that the client was unable to meet the grace period, he must also repay the debt to the bank. It is important to understand that the interest rate can be quite high, for example, 20-30% per annum.
The installment card provides the opportunity to make purchases only in those retail outlets that are partners of the bank. K creditka allows you to make payments anywhere.
The installment card does not provide the ability to withdraw cash. A credit card, on the contrary, allows you to do this, but such transactions involve a commission.
Installment cards are free of charge - the client is not required to make payments. Credit cards may require an annual service fee. For example, the standard package requires a service fee of 1,000 rubles/year, and the premium - 15 thousand rubles/year. At the same time, funds are often written off the next day after the client activates the card. This fact becomes a rather unpleasant surprise for many.
Try paying in installments
First payment only after 30 days
Find out the limit
How to use an installment card profitably
Obviously, the main advantage of using an installment card is that the buyer can purchase the goods at any time, pay for them later and not overpay. At the same time, most financial institutions limit themselves to this. Only a small number of banks implement mechanisms in their systems that allow increasing the profitability of having an installment card.
For example, financial institutions may offer the opportunity to sign up for subscriptions that allow you to extend payment terms, increase limits, etc. It is important to always consider the additional features of the product to get even more benefit from its use. However, always remember to carefully study the terms of the offer.
What to consider when applying for an installment card
Having decided to purchase an installment card, it is worth knowing several important points that need to be taken into account when applying for it.
It is not possible to get a 12-month installment plan everywhere, so it is important to familiarize yourself with the rules of both the store and the bank. There is a possibility that the necessary product can be purchased in installments for no more than 4 months, and sometimes even less. Such restrictions may not please every customer.
The card allows payment only in certain places - stores that are partners of the bank. It is important to familiarize yourself with the list of retail outlets, perhaps most of them do not suit you. Compare the cost of the desired product in other stores, perhaps the desired product costs significantly less there, even without an installment plan.
There are situations when a customer is not given the opportunity to purchase a product that is subject to a discount. In such a case, using an installment card may be a worse decision than purchasing the product that is subject to the promotion.
Experienced economists have concluded that if you provide the opportunity to make purchases at one time and pay at another, the average customer check increases significantly (2-3 times). This means that the risk of making unnecessary, thoughtless purchases increases significantly. You need to use the product wisely, rationally assessing your needs.
Make timely payments. In case of failure to fulfill obligations, the bank has the right to charge a fine and send information about the delay to the credit bureau. Thus, the data will be reflected in the credit history, which means that in the future the client may experience difficulties when trying to take out a loan. Also, in case of failure to repay the debt within a certain period of time, the bank will charge interest on the remaining debt.
An installment card is a convenient and profitable financial instrument, but it is important to use it wisely.
Pros and cons
Installment cards are a reliable and profitable financial instrument, but they have both their pros and cons. So, here are the advantages of installment cards:
Payments are made in parts and over a long period of time. The product provides for monthly payments for a period of 1 to 12 months or more.
Fast and easy to obtain. Obtaining a card is a simple process that only requires a passport and a certificate that the client is officially employed.
The application for the product can be made online. Thus, the client only needs to use the Internet, provide his personal data and if the documents and credit history are in order, approval can be expected.
Completely free service. Some financial institutions provide additional programs, such as cashback (return of % of the funds spent) in case of purchasing goods of a certain category. More detailed information can be found on the website of a particular bank.
There is no doubt that installment cards are liked by many customers due to their undeniable advantages, but this tool also has some disadvantages, among which the following stand out:
The main disadvantage is that it is less versatile than credit cards. Purchases using this product can only be made in the bank's partner stores.
Also, the installment card does not provide the ability to make transfers or withdraw cash. In this regard, credit cards are a more flexible instrument.
In case of late payment, the buyer's credit history may be seriously damaged, which may result in a refusal when applying for a loan in the future.