When it comes to making purchases with our credit card, many times we can fall into the habit of choosing the option of paying in installments for the goods we acquire with them. However, is this the best decision? And if so, in how many installments should we choose to pay with them?
Credit card fees
It must be remembered that buying in installments, with the credit card, generates interest. That is to say that it is not that we take out a product that costs S / 600, in six installments, and we pay only six monthly installments of S / 100. There is nothing further from reality, and that is that the bank’s interest and commissions must be added to that amount, which, in the case of credit cards, are usually the highest in the market.
So is it good to buy in installments?
If there is a need to buy in installments we can use this option to purchase products that are necessary. For example, a new computer to work or study from home; some appliance that is needed in the home to improve the quality of life of all, etc.
Ideally, we use it for goods that we really need and that at the moment we cannot afford. As for the fees, it is recommended that the amount of fees does not exceed the life of the product. For example, it would not be consistent to use your credit card to pay for a buffet for 10 people and cancel it in 3 months.
How to determine the number of installments for each product?
Next, we tell you in how many installments it would be convenient to purchase certain products if you do not have the money to pay them in cash:
- Not necessary expenses, for example, that outing to the restaurant for ten people, from the example, it would be ideal to cancel it in a single installment, so it will not generate interest.
- Necessary personal expenses; for example, clothing, footwear, can be requested in up to 12 installments, although it will also depend on the cost.
- Vacation expenses can be paid for up to 12 months, more or less the time it would have taken you to save for them.
- Larger expenses such as appliances or technology can be paid for in more than 12 installments.
Ideally, you should be able to plan, before your purchase, the best number of installments to pay for the products you need. Remember that less fees and less interest and commissions. In addition, whenever you can, pay for the product in cash or take advantage of those offers of interest-free payments from your credit card.