0% Installment Scheme
September 24, 2008 – 3:02 pmI remember writing a post previously regarding my friend’s plan to purchase a car with his credit card. He told me that he gets to enjoy 0% installment scheme for his purchase and that he would not have to pay any interest on the credit that he has charged on his card.
Well, I was thinking that this can’t be right as I know that when we opt for 0% installment schemes, the interest has already been divided and added into the monthly amount to install.
The other day, I had the opportunity to get my hands on a brochure for laptops. Well, as you know, I already bought a laptop not too long ago so I did not have any interest in buying one again but I did some calculations purely for academic purposes.
According to this brochure, if the buyer who opts in to a 0% installment scheme pays for his laptop purchase with a Maybank, HSBC or CIMB bank credit card, he will have to pay RM349.92 per month for 12 months. If he were to pay for this purchase with an AEON credit card, he will have to pay RM405.00 per month.
For your information, the cash and carry price for this Compaq laptop is RM3599. This means that this buyer will be paying RM50 extra per month, or a total of RM600 if he is using a Maybank, HSBC or CIMB bank credit card. And he is paying an extra of RM105 per month or a total of RM1261 if he were to use AEON credit card.
Further, I did a calculation to see what percentage RM600 and RM1261 are based on the total sum of RM3599 for the cash and carry price of the laptop. RM600 turns out to be 16.67% while RM1261 is 35% of RM3599. And I tell you, 16.67% is double the interest rate of loan sharks!
So who said this is a 0% installment scheme?
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2 Responses to “0% Installment Scheme”
Non-over the counter brand like Dell will have no hidden charge. You can really split up your payment in 12 months.
BUt, there’s a catch when it comes to credit card. Dell won’t charge extra, but you have to be careful when it comes to credit card interest. Do correct me if I’m wrong…. the 28/30 days interest-free grace period for your purchases is only good if you have no leftover credit card balance from last month. If you didn’t clear your monthly charges every month, there’s no such thing as the 28/30 interest-free period.
By helen on Sep 24, 2008
Hi Helen,
Thanks for your input. You are right about the interest-free grace period. We have to settle all outstanding balance to enjoy it.
By Cyberpartygal on Sep 24, 2008