At a glance, the lives of Petelem customers who have made a down-payment purchase will be easier. The new development of Mastercard and Credit Institution will soon allow you to make a one-touch decision at checkout when purchasing a credit card: whether you want to purchase it at full price or at a fraction of the cost. The second development in Europe is currently available to 2,000 selected customers, but in 2018 it will be available for almost all card payments.
Credit card detail? What do I pay for?
The new credit product is trying to bridge the gap between a trade loan and a personal loan, said a joint press conference between Petelem, Mastercard and Opotert. This way, we can easily and easily buy products for which we have not yet been able to borrow goods, but a personal loan would have been a lot. Typically, such an event in the life of the family is the start of school, which is a significant financial burden, but it is not necessarily worth financing through credit.
Don Juan Pzabo, President and CEO of Yagmar Petelem Bank also added that the installment payment was still available to them, but that the customer had to notify them by telephone after the purchase to pay in installments. This is an uncomfortable, not very modern procedure that is now being replaced by a Mastercard upgrade.
What does credit card shopping look like?
- Likewise, reading or touching your credit card will begin the payment process.
- However, the developed POS terminals will offer full or installment payments.
- If you choose to pay in installments, you can choose between 3, 5 or 10 monthly installments.
- The terminal will show the amount charged for the loan, which will be paid until the end of the term. We need to approve this.
- The voucher will include the price of the product, the amount of the first installment, the size of the other installments, the interest on the loan and other charges.
What should a trader know about such a transaction?
- You do not need to buy a new terminal to use the new service, but a software update is enough.
- The merchant pays the buyer completely from his credit line. The installment payment is made between the buyer and the issuer.
What should the buyer know about such a transaction?
- You will not need a new card to use the new service.
- The minimum amount you can pay by installments is $ 50, and the upper limit is your credit line or 99 installments.
- You can choose from 3, 5 and 10 monthly installments, of which 3 months are interest free . And the 5 and 10 monthly installments have a 28.5 percent APR lower than a credit card’s nearly 40 percent APR.
- If you use your credit card in the traditional way, but have also purchased for a down payment, you will have to pay the down payment at least in addition to the minimum fee so that you will refund the money to the card.
- If we see the “Mastercard Installment Payment” logo in a shop, we can use the service there.
Installment payments going everywhere soon
There is practically no obstacle to making installment payments not only for credit cards but also for debit, ie credit cards. The future may be the development of installment payments from overdrafts, but not only for physical payments, but also for mobile or online payments. The press conference also revealed that 5 other financial institutions are currently testing the service and that Petelem will be extending its service widely to its customers after the first quarter of 2018.
Mr. and Mrs. Crews’s opinion : This is basically a good-bye to commodity loans, or perhaps to say that they will undergo a major transformation. The 3-month interest-free period can be very tempting, as we have 90 days here, as opposed to the 45-day repayment cycle. If you have a low credit line, you will need to be careful with your bank’s money, as the entire amount will be deducted at the time of purchase and then refunded in monthly installments. That way, anyone who is used to using the full amount from month to month will be forced to make less until they have fully downloaded the details. The service will definitely be useful in cases where you do not want to borrow more to buy a consumer product. The question is, will there be a banking interface where we can effectively manage our various down payments?