Buying big ticket items via CC ! Old habit die hard !

[congo9]

We buy HDB flats on instalment !
We buy cars on instalment !
We buy Big ticket item via CC instalment !

Why are we always buying things on instalment ?

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SINGAPORE: More Singaporeans are paying for their big-ticket items via credit card instalments during these tough times.

From July-November, some retailers reported a 10 per cent increase in the number of consumers who opted for monthly instalment payment.

Gain City's marketing manager, Evonne Lee, said: "It kind of stretches the dollar in that sense and it gives the customer a lot more discretionary income. For example, if you buy, say, LCD which is worth $3,000 and you opt for a 24-month instalment plan - that works out to be about $125 a month; it makes the purchase very affordable."

Increasingly, younger customers are buying products and opting to pay via instalments. And they're paying these instalments over a 12-month period.

Gain City expects that figure to grow, come next year. The company also expects another 20 per cent of customers to opt for instalment payments with repayment plans extended to 36 months.

But paying by monthly credit card instalments has landed a 42-year-old sales administrator in trouble. The man (who refused to be named) chalked up S$110,000 debt from buying home appliances.

He said: "That time, the instalment was just, maybe, about $500 only. I thought I could still afford more instalments. So I took up another instalment. Then, I thought (I) still could afford. I took some computer products, until it (instalment) accumulated to about $1,200 per month....that kept on accumulating until I reached a certain stage I found that it was too burdensome for me to service all the instalments."

Like him, many are turning to Credit Counselling Singapore for help.

Credit Counselling Singapore's president, Kuo How Nam, said: "The risk to these people will be that moving forward and if the recession is very deep, and you see the number of retrenched people going up, these people will find difficulty in meeting their instalment plans. If you can, postpone the purchase. Better to be safe, rather than sorry later on."

In the last five months, there has been a 50 per cent jump in the number of Singaporeans turning to the centre for help on debt management

 

[chinkangkor]

Next year, the number of s'porean FL gals will probably shot up.

 

[Gillette]

Nothing wrong with paying using interest free instalments over 12-36 months. Assuming they can afford the goods in the first place, consumers are just taking advantage of the free financing from credit card companies.

 

[makapaaa]

66%: Strait Times say econ in Sg still good what! SM also tell us to spend to help economy what! What's ur ulterior motive?

 

[Conan the Barbarian]

Nothing wrong with paying using interest free instalments over 12-36 months. Assuming they can afford the goods in the first place, consumers are just taking advantage of the free financing from credit card companies.

The financing seems free. But once you are on installments, the banks will not waive the yearly cc subscription fee. The 12 months installment will definately stretch into the next year and make you liable for the renewal fees.

If you try to pay up early to avoid the fees, then you will be liable for early payment charge which amounts to more than the annual fee.

 

[jw5]

Nothing wrong with paying using interest free instalments over 12-36 months. Assuming they can afford the goods in the first place, consumers are just taking advantage of the free financing from credit card companies.

Is there a catch to the free financing? Is it really interest free?

 

[congo9]

Is there a catch to the free financing? Is it really interest free?

Once u are late in paying or you didnt pay the stipulated amount. It will become very expensive.

There will be late charges if you pay later then the date due. On top of the late charge, they will start to charge you the 2% on the NETT amt which is due , which include the late charge for the month.

Banks are oppourunitst ........ that is becos they have the money to play around with you. They can give you 36 mth ....24 mth , but surely once in the while they will catch you napping. That how they earn money from consunmer. BTW , the CC charge when retailer use their machine is just chicken feet. The main bulk of income comes from consumer.

 

[jw5]

Which further proves the saying that a fool and his money are soon parted.

 

[zhihau]

The financing seems free. But once you are on installments, the banks will not waive the yearly cc subscription fee. The 12 months installment will definately stretch into the next year and make you liable for the renewal fees.

good to note that a number of banks are issuing free credit cards*

*terms and conditions apply

 

[VIBGYOR]

Why are we always buying things on instalment ?

maybe they are waiting for the congress to bail them out?

 

[Conan the Barbarian]

good to note that a number of banks are issuing free credit cards*

*terms and conditions apply

Yes, in the case of free subscription cards like Maybank and Manhattan, its worthwhile to pay by installments. But only if one already has the cash in hand for the items.

Living on credit is one of the many roads that lead to slavery to debts.

 

[zhihau]

Yes, in the case of free subscription cards like Maybank and Manhattan, its worthwhile to pay by installments. But only if one already has the cash in hand for the items.

Living on credit is one of the many roads that lead to slavery to debts.

didn't like that Manhattan card, you realized the moment you sign anything more than 500bucks, it is automatically converted into some 24 months repayment scheme? i canceled that card already

Maybank offering 10year free card, but not sure about the details... :p

i advocate this: income - savings = expenditure

 

[Ah Guan]

Is there a catch to the free financing? Is it really interest free?

If you go to a neighbourhood electrical appliance shop and willing to pay full in cash, you can get up to 30% off from the RRP of the same models in Courts/Harvey Norman etc.

Common sense tells us financing is never free. You pay a premium for the time value of money, admin charges and risk of default.

 

[nextinfidel]

no money don't buy. except for all these pigeon holes, never buy anything on credit or instalment

 

[VIBGYOR]

But paying by monthly credit card instalments has landed a 42-year-old sales administrator in trouble. The man (who refused to be named) chalked up S$110,000 debt from buying home appliances.

Wholly crap! What did he buy? 50 LCDs TV? :p

 

[VIBGYOR]

i advocate this: income - savings = expenditure

i give you a better formula.

if it is a need, BUY!

if it is a want, DON'T BUY!

 

[oli9]

But paying by monthly credit card instalments has landed a 42-year-old sales administrator in trouble. The man (who refused to be named) chalked up S$110,000 debt from buying home appliances.
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Me thinks most Sinkies are retarded in mathematics. How can one chalked up a $110K debt without realising it?
I hope he gets a writ of summons notice serve on him.
Courts is also uses a very clever gimmicks at seducing certain races in Spore to buy their products via instalments.

 

[nextinfidel]

But paying by monthly credit card instalments has landed a 42-year-old sales administrator in trouble.
Courts is also uses a very clever gimmicks at seducing certain races in Spore to buy their products via instalments.

melayu. but you have to look at it this way also.
people in my office and circle of frens have weddings at 5 star hotels, drive cars, cheong Zouk, mahjong, shopping, and go for 3 weeks honeymoons costing 5 digits....isn't that installment from the credit cards companies instead of Courts?

anyway, got to be aware when you buy big things from those retailers who offer installment plans. You don't want to end up with a re-possessed item.

 

[0939]

There are some who can spend
There are some who think they can spend
There are some spend first and pay later

 

[Gillette]

Once u are late in paying or you didnt pay the stipulated amount. It will become very expensive.

There will be late charges if you pay later then the date due. On top of the late charge, they will start to charge you the 2% on the NETT amt which is due , which include the late charge for the month.

Banks are oppourunitst ........ that is becos they have the money to play around with you. They can give you 36 mth ....24 mth , but surely once in the while they will catch you napping. That how they earn money from consunmer. BTW , the CC charge when retailer use their machine is just chicken feet. The main bulk of income comes from consumer.

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Financing is free so long as the stipulated amount is paid on time. Those are the rules. If the person cannot afford or pay promptly, then he should not be taking up credit card installment in the first place. To be fair, the banks are not wrong to impose penalties for late payments.