Many Russians are unable to immediately pay for expensive goods or do not want to do so. Of course, the purchase price will increase slightly, but payment can be made in installments, which will be invisible to the family budget. A common example is mortgages. You pay part of the cost of residential real estate, live in it and make regular monthly contributions.
In other words, you can buy any goods on credit. However, consumers are faced with a choice: what is better installment plan for a short period of time or a credit card?
Let’s figure it out. Below we will see what kind of financial products they are, what advantages and disadvantages they have, how they differ from each other and what is better to open.
KR is a payment instrument that makes it possible to purchase goods / services in stores that are partners of a banking institution. If you make payments on time, you can prevent additional interest and use borrowed funds for free. With such cards, we recommend purchases only in partner stores, we do not recommend withdrawing money from them and delaying payments. Otherwise there will be fines, pennies, commissions.
To avoid additional costs, read the terms of the contract, and if something is not clear, clarify the nuances in customer support.
KK is a payment instrument that allows you to manage borrowed funds for a certain period. In some banks, it is activated on the day of issue, in others – on the first payment, in others – on the first day of the month. Each bank has its own policy.
All CCs are offered to customers with a non-zero balance. The loan can be used to pay for goods, housing and communal services, training, communication costs, orders in restaurants, etc.
Differences between cards
In both cases, cardholders will use the lender’s money.
What is the difference between an installment card in banks and a credit card:
- With CC there is no difference where to spend borrowed funds. Only partner retail chains are recommended with KR
- You can withdraw money from CC. Yes, the interest is high, but if there is nowhere to go, and the money is needed urgently, there is an opportunity for cashing out. Do not withdraw money from the Kyrgyz Republic
- Maintenance of QC requires expenses from its holder, but QR does not
- You will have to return to the credit card more than they took. On the installment card, you need to return only the amount that was borrowed. Of course, provided that there were no violations
Pros and cons of installment cards
Installment card advantages:
- Free service
- You return to the lender as much as you took, if the contractual terms are not violated
- To obtain a card, a passport plus official employment is enough
- Installments up to a year, but mostly 2-3 months. It all depends on the policy of the affiliate store. But there are exceptions. For example, Halva (see below)
- Some cards allow you to get cashback
Disadvantages of a financial instrument:
- Not every item has an annual installment plan.
- The card can only be used in partner stores. When making purchases outside the affiliate network, there may be commissions and interest
- You may not be able to purchase discounted items
- The risk of making unnecessary purchases increases. Because it is possible to buy now and pay later
- You need to make payments on time. Otherwise, you will be charged fines, and the delay will spoil your CI
- The limit is small, up to 350 thousand, and at first it will be even less
Pros and cons of a credit card
Advantages of a financial instrument:
- Possibility to use the money of the lender
- Presence of a grace period, from 51 days. If the client manages to return his money to the bank during this time, the funds can be used almost free of charge. You only need to make the minimum payment
- Credit cards are accepted in any stores, even outside the affiliate network
- Having paid off the debt, the cardholder can take out a loan again without re-applying to the lender
- Can cash out
- There is an opportunity to participate in bonus programs
- Limit – up to 1-1.5 million rubles.
Disadvantages of the payment instrument:
- You have to pay for service
- If you do not meet the grace period, the interest will be large
- When cashing out, you cannot avoid a commission, and in the vast majority of banks, when withdrawing money, there is no grace period
- You have to return the money to the bank with interest
What is the best way to open
There is no standard recipe. It has to be based on the specific situation.
If you are going to shop in a partner retail network, pay for goods by bank transfer, withdraw money and do not want to pay for service, it is better to choose an installment card.
If you want to use a financial instrument in any stores, get more borrowed funds, withdraw money and pay for services without any problems, a credit card will do.
However, there are exceptions to the rule.
Take, for example, KR Halva. It has an installment plan for 10 months, and if you join the 5×10 bonus program, there will be an additional installment plan! Plus cashback up to 6% (subscription to “Halva. Ten” will increase the return to 10%), 12% per annum on the balance and the ability to CASH funds for the quarter! In this case, the difference between the installment card of Sovcombank and the credit card will be minimal.
Of the credit cards with a long grace period, we can note:
Tinkoff went the farthest in this matter. An option is automatically connected to all bank credit cards that allows you to purchase goods in installments! If the installment is activated, the purchase is not included in the credit limit. In their personal account, customers can see the processing time and Tinkoff partner stores.
We have given you the information, it remains for you to decide which installment plan from a bank or a credit card is more profitable.