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Credit cards with instalment plans
Pay off your debt at a pace that works for you with credit cards that offer instalment plans.
Some credit cards give you the option of paying off some or all of your balance through structured instalments. This payment plan breaks your balance down into equal instalments that you’ll make over a fixed period of time. You may find it’s easier to budget your repayments and, what’s more, you may benefit from lower interest rates.
Use this guide to compare credit cards that offer instalment plans, and learn more about this repayment feature.
Compare credit cards with instalment plans
What’s a credit card instalment plan?
Instalment plans provide you with a structured repayment schedule for your credit card balance. So, instead of paying some or all of your balance at the end of a statement period, you’ll pay a fixed amount each time a payment is due.
Depending on the credit card, you could set up an instalment plan for your entire account balance, part of your balance or for specific purchases. Some credit card instalment plans offer lower interest rates when you set up this option.
How does a 0% instalment plan credit card work?
As its name suggests, a 0% instalment plan credit card is one that lets you pay 0% interest on individual purchases for a stated period of time. Typically, you can nominate between three months and three years over which to make the repayments. This allows you the flexibility to opt for lower repayment amounts over a longer period or higher amounts over a shorter period.
A credit card with an interest-free instalment plan can, if used smartly, help you control your spending and save you from paying a major expense all at once. However, there are some additional factors and costs to keep in mind when it comes to credit cards that offer instalment plans.
What you need to know before taking out an instalment plan
- Your rewards points – and other cardholder benefits – may be suspended. Many banks remove reward point earning and other benefits when you sign up for a 0% instalment plan. This is one way in which banks recoup some of the losses incurred by offering an option with 0% interest.
- The entire amount is deducted from your credit limit when you pay. Even though you’ll be making smaller repayments via instalments, you’re still charged the full amount of a purchase upfront. Be sure you keep this in mind if the size of your purchase is close to your credit limit. You don’t want to make a purchase and then find you can’t use your credit card for other necessities because it’s already maxed out.
- You may have to pay fees, including early repayment fees and admin fees. While the appeal of an interest-free instalment credit card plan may be obvious, many people get surprised when they’re told of additional fees and charges that need paying. Administration fees are usually calculated as a percentage of the price of your purchase and tend to be applied when a merchant and bank don’t have an existing agreement in place. If you’re able to repay your plan early the bank may also charge you an early repayment fee, which is typically a flat amount.
- You can’t cancel your card before you pay off the payment plan in full. This can be important if the terms of your card are set to change over the duration of your instalment plan. For example, if your card offers promotions or waives certain fees for a set amount of time. If you open an instalment payment plan with this card, you won’t be able to cancel it without first paying off the total balance.
What types of credit card instalment plans are available?You can use this table to compare the types of instalment plans available through different credit card companies and cards.
|Credit card company||Eligible/cards||Summary of instalment plan options|
All AMEX credit cards (subject to offer and eligibility)
|HSBC||All HSBC credit cards|
|Maybank||All Maybank credit cards|
|Standard Chartered||All Standard Chartered credits (excluding corporate credit cards, Standard Chartered Platinum Access credit cards & credit cards with S$500 credit limit|
Pros and cons
- Structured repayments. You’ll pay the same amount off your card each month.
- Easier to budget. Instalment repayments are always worth the same amount, which can make it easier for you to work out your budget.
- Account benefits. Depending on the card you get, you may be able to enjoy benefits such as discounted interest rates or debt-tracking tools.
- Less flexibility. If you want the convenience of being able to pay a smaller amount off your card, an instalment plan may not be ideal.
- Different interest charges. If your instalment plan only covers part of your card balance, different interest charges may apply to some of your debt. This could make it harder to budget for these costs.
- Additional fees. Some instalment plans may apply processing fees or penalty charges if you miss a payment.
What else do I need to know about credit cards with instalment plans?
Keep these features in mind to decide if a credit card that offers instalment plans will work for you:
- Annual fee. Remember to weigh the credit card’s annual fee against its benefits to decide if the account will be worth it for you.
- Interest rates. Make sure you check all the interest rates charged by the card, keeping in mind that some instalment plans may offer 0% interest for a fixed period of time before a higher rate applies. Also remember that interest may still be charged on any other balance that’s not included in the instalment plan.
- Additional fees. Depending on the card, fees for early, late or missed payments – or for processing an instalment plan – may apply.
- Payment requirements. If you set up an instalment plan, you’ll need to make repayments at the specified rate for that plan. But if you have a balance that’s not included in your instalment plan, you may need to pay more than the fixed amount in order to cover your account’s minimum repayment requirements. So carefully read through the details of each balance and check your statement to make sure you know exactly how much you need to pay by the due date.
- Eligible balances. Credit card instalment plans may only be available for specific types of payments or balances, such as individual purchases over S$250 or S$500. This could mean not all of the balance on your credit card is included in the instalment plan. So remember to check what debts will be eligible for instalment repayments and decide whether this option will work for you.
- Cancelling instalment plans. Each credit card that offers instalment plans will have different terms and conditions around cancelling the plan. Usually, repaying it before the end of the plan is fine. Some plans also allow you to cancel instalments at any time without additional charges.
What other repayment options might I consider?
As well as instalment plans, you could choose to pay off your credit card debt using one of the following options:
- Regular repayments. Regular credit card repayments are due at the end of your statement period and usually require a minimum of 2-3% of your closing balance. This gives you the flexibility to vary how much you repay based on your financial needs.
- Automatic payments. Most cards offer automatic repayments similar to direct debits. Depending on the credit card, you could choose to have the minimum amount, the total owed or a dollar amount of your choosing automatically deducted from your nominated bank account.
- Balance transfers. If you already owe a lot on your credit card and are worried about interest costs, another option is to transfer the balance to a card that offers a promotional 0% interest rate during the introductory period. Just remember that you’ll have to budget for repayments yourself, rather than relying on an instalment plan or the minimum repayment amount. Otherwise, a higher rate will apply to the balance at the end of the introductory period.
- Personal loan. Personal loans usually offer structured repayment plans that allow you to pay off your debt over a fixed term. This is similar to a credit card instalment plan, except that your personal loan will be closed when you have paid it in full, while your credit card account remains open until you choose to cancel it. Still, you may want to consider this option if you already owe a lot on your card and want more structure for paying off the debt.
Getting a credit card that offers instalment plans gives you another way to structure your repayments and manage your budget. Just remember to consider the requirements of the instalment plan carefully before you apply for a card and weigh up other repayment options, so that you can find one that suits your needs.Back to top
Frequently asked questions
What happens if I miss an instalment repayment?
This will depend on what has been stipulated by your instalment repayment plan. Most plans either charge a missed repayment fee or start to charge interest at a predetermined rate.
What if I set up an instalment payment plan in order to pay for an annual membership, then the company providing the service folds?
You may not be able to get this money back, so think twice if you’re using the funds to pay for an ongoing service, like the gym. When you sign up for a 0% interest instalment payment plan you become indebted to the bank, not the vendor. You’ll have to pay the bank back regardless.
How do I know which merchants my bank has deals with?
This information is readily available on the websites of each bank. If you’re eyeing a specific purchase and want to try avoid extra costs, be sure to check whether your vendor is already engaged with a certain bank.
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