What are the advantages of credit card installment?

Credit card installment means that when the cardholder uses a credit card to make large purchases, the bank pays the merchant a one-time payment for the goods purchased by the cardholder (or service), and then allow the cardholder to repay the bank in installments and pay handling fees. So what are the advantages of credit card installment?

1. Ease repayment pressure: The biggest benefit of handling credit card installment business is to reduce the burden. When the single-issue bill is too high, the cardholder will be under greater pressure to repay in full. Bill installment can spread the bill over multiple months, spreading the repayment, and the cardholder will have less repayment pressure. Just imagine, if you ask your parents to borrow it, your family will be worried; if you ask your friends to borrow it, you will owe a favor, and it is better to exchange it for bank interest if you treat guests to dinner in the future.

2. It helps to increase the credit card limit: Banks rely on handling fees, interest, annual fees, etc. There are installment handling fees for handling credit card bills in installments, which allows the bank to make money. Of course, the bank will hope to keep it. Cardholders often handle installment business. The underlying rule is that when cardholders apply for bill installments and apply for a credit card limit increase from the bank, the bank will be more willing to approve it, and the success rate of the limit increase will increase.

3. Credit card bill installments have discounts: Banks will hold some credit card preferential activities from time to time, including credit card bill installment preferential activities. At this time, when applying for credit card bill installments, you can reduce or reduce certain interest or It’s the handling fee, but it’s quite worthwhile.

4. Credit card value-added discounts: Bank credit cards generally have special discount merchants. You can get discounts or gifts for purchases in shopping malls, and points are accumulated for purchases, which can be exchanged for gifts, airline miles, or cash in the future.

The above is all about the advantages of credit card installment.

What are the advantages and disadvantages of credit card installment?

1. Benefits of credit card bill installment

1. Relieve repayment pressure: Handling credit card installment business is definitely the biggest The advantage is to reduce the burden. When the single-period bill is too high, the cardholder will be under greater pressure to repay in full. The bill installment can spread the bill to multiple months, spreading the repayment, and the cardholder's repayment will be reduced. The payment pressure will be less. Just imagine, if you ask your parents to borrow it, your family will be worried; if you ask your friends to borrow it, you will owe a favor, and it is better to exchange it for bank interest if you treat guests to dinner in the future.

2. Credit card value-added discounts: Bank credit cards generally have special discount merchants. You can get discounts or gifts for purchases in shopping malls, and points are accumulated for purchases, which can be exchanged for gifts, airline miles, or cash in the future.

3. Helps to increase credit card limit: Banks rely on handling fees, interest, annual fees, etc., and there are installment handling fees for handling credit card bills in installments, which makes the bank make money. Of course, the bank will hope to keep it. Cardholders often handle installment business. The underlying rule is that when cardholders apply for bill installments and apply for a credit card limit increase from the bank, the bank will be more willing to approve it, and the success rate of the limit increase will increase.

4. There are discounts for credit card bill installments: Banks will hold some credit card promotions from time to time, including credit card bill installment promotions. At this time, when you apply for credit card bill installments, you can reduce or reduce a certain amount of interest or It’s the handling fee, but it’s quite worthwhile.

2. Disadvantages of credit card bill installments

1. Reduce the available limit: Since the credit card limit is fixed, if the bill is installed in installments, the flexible utilization limit will be reduced, which will affect the acceptance of credit cards. down consumption.

2. It can easily lead to over-consumption: Since it takes a long time to repay the money, and only a little bit is repaid every month, the repayment method is "spend 240 yuan and only repay 20 yuan a month" It is easy to create an illusion for cardholders, that is, they spend money casually and repay easily, which easily leads to excessive consumption, high bills, and selfless consumption.

3. Bear the installment handling fee: Every bank charges a certain handling fee for credit card installment business, and different banks charge different fees. Taking China Merchants Bank in 12 installments as an example, the handling fee is 0.66%. The longer the installment time, the higher the handling fee. Then, when the installment bill is 5,000 yuan, you need to bear an installment handling fee of 33 yuan per month. 12 *** will bear the handling fee of RMB 396 for the first term. Moreover, the handling fee will not be reduced or reduced, and early repayment will also be deducted.

Be careful when applying for credit card installments. Discounts on handling fees are not necessarily cost-effective

Banks have stepped up their efforts to promote credit card installment services. They have called many cardholders and sent text messages to invite them to apply for installments. What do they say? The handling fee is now only 45% off, so if you miss the opportunity, you won’t be able to enjoy the discount. It does seem very tempting, but I want to tell you that there are many tricks in credit card installment, so you must handle it with caution.

Many cardholders who received invitations to apply for installments said that bank staff told them that the installments were interest-free and there was no need to worry about any interest. But you have to know that interest-free does not mean free. After all, credit card installments require installment fees every month.

Of course, don’t think that the installment fee is definitely a good deal. You must know that the interest rate you see on the surface is not the real interest rate. This is because the principal repayment of the credit card installment every month is fixed, regardless of It doesn’t matter how many installments you repay, so the interest rate you pay is actually much higher.

The following example can give you a clear idea of ??how high the credit card installment fee is.

Assume that Mr. Li plans to repay this month's 20,000 yuan bill into 12 installments. The handling rate for each installment means that the monthly repayment amount is 1,817 yuan. This 20,000 yuan is calculated based on the remaining monthly repayment principal. When it decreases month by month, the average monthly capital occupation is 10,833 yuan, and the actual annualized handling fee rate is 1,817/10,833 = in fact , many installment fees are higher than this data. However, some people see that the handling fee is so high and want to know if they can save some handling fees if they repay the loan early. The answer is no! Most banks stipulate that you can pay off your credit card in installments in advance, but you have to pay the remaining unshared handling fee in one lump sum. For this reason, even early repayment does not make sense.

What is the concept of 40% off credit card installment payment?

Generally, it refers to a 40% discount on handling fees.

Credit card installment repayment generally refers to a single purchase that meets a certain amount, swiping the card once, and then repaying it in parts such as 3, 6, 12, 24, etc. The more installments you get, the more additional payments you need to make. The higher the handling fee, so 40% off the handling fee is a big discount.

Why do some credit cards (debit cards) have their balance reduced as soon as they make an installment?

The main reason why some credit cards (debit cards) have their balance reduced in one installment is because the bank feels that the cardholder does not have enough repayment ability. If the cardholder often applies for installments, especially for more than 3 consecutive months, and the number of installments is more than 6, it is easy for the bank to question the cardholder's repayment ability, thinking that the cardholder needs to rely on installments to ease his repayment ability. , so a reduction will be run on the cardholder's credit card (credit card). If the loan is repaid in full, even if the installment is done only occasionally to increase the limit, and the number of installments is not long, the bank will not take the initiative to reduce the amount.

This ends the introduction on why credit card installment discounts are available and whether it is worthwhile to use credit card installment plans. I wonder if you have found the information you need?