Credit cards can have a very high credit limit if they have the appropriate credit rating. As a rule, the claimed amount is paid back in full at the end of the month. You can pay the amount in installments by installment payment (also called partial payment). http://www.sualci.com/direct-lenders-all-payday-loans-direct-lenders-easy-online-application/ for more.
What does installment payment mean?
You should be familiar with the principle of the installment loan. The total amount is divided into several monthly installments. That can be around 105 USD for the next 12 months. Partial payment works similarly for credit cards.
Installment payment is an optional additional service. It helps with financial bottlenecks. If the washing machine breaks unexpectedly, you will need a new device quickly. But your credit card bill will be repaid in two weeks. Therefore activate the partial payment to pay the due amount in installments.
The card provider collects the sales of one month. Let’s say it is August. The full amount is due at the end of September. Are you short of capital? Then choose a partial payment with three monthly installments. The sum is divided into three convenient installments.
What are the advantages of this additional service?
In general, you benefit from a high degree of flexibility. If you need the money elsewhere, you can simply use the installment payment. This may save you from taking up an additional loan. The amount of the monthly installments can be determined variably. Usually only a certain minimum amount is specified.
Another advantage is the interest-free period. When paying by debit card, the full amount is collected directly from your checking account. If the credit is insufficient, interest is charged on the overdraft facility. The credit card, on the other hand, collects the payments and only debits them after about 30 days. This way you can save enough capital for the card bill. If it gets tight, use an installment payment.
The open amount can be paid at any time. To do this, you simply balance the credit card account. This means that you can also make special repayments. The loan debt can be divided into any amount.
Overview of the advantages of paying in installments:
- high flexibility
- Fees only when activated
- financial buffer for emergencies
- interest-free period
- individual monthly installments
- free special repayments
What to pay attention to?
A certain credit rating is required. With negative Credit bureau a credit card with payment in installments is almost impossible. The applicant must have a permanent employment relationship. In addition, the amount of the credit limit is based on income.
The installment payment can prove to be a debt trap. The overview of the total amount is quickly lost. If you tend to make expensive spontaneous purchases, you should note the expenses separately. This avoids the risk of over-indebtedness.
Real credit cards often cost an annual fee. You will receive a significantly larger range of services. As a consumer, you benefit from useful insurance such as travel insurance. In contrast, a prepaid credit card has no credit limit. A high degree of flexibility is lost.
Tip: Some credit cards are exempt from the annual fee in the first year. So you can test the offer free of charge and change it if you don’t like it.
Normally, fees only apply after the payment deadline. It is usually 30 days. However, some providers charge immediate debit interest. This applies above all to cash withdrawals at ATMs. Here you should pay the amount by one-time payment to avoid unnecessary expenses. If you also request a partial payment, this will drive up the costs again.
The debit interest on the credit card is the most important cost when paying in installments. These are at the level of a overdraft facility. Check the amount of interest on your installment loan. Otherwise you can experience an expensive surprise. The opposite is also possible: Some card issuers offer interest-free periods of 60 days. If you want to split the total into two installments, there are no fees.