What does credit card billing mean by installment? Is it cost-effective?

In a blink of an eye, credit cards have been in China for 30 years, and the number of credit cards issued every year is increasing rapidly. Due to the fierce competition in the credit card market, the competition among major banks is becoming increasingly fierce, and major banks have shown their magical powers and launched various preferential activities to attract users to open cards. After spending by credit card, we often receive phone calls or text messages from banks, asking for credit card bill installment business. So what does credit card bill installment mean? Is it cost-effective to pay the credit card bill in installments?

What does credit card billing mean by installment?

Credit card bill installment refers to applying for installment payment for the bill that has been issued and then returning it to the bank on a monthly basis. Generally speaking, a large bill is divided into t months, and a part is paid each month, which can reduce our burden and improve the flexibility of repayment.

So is credit card installment really cost-effective?

First of all, credit card billing has certain advantages. On the one hand, it can help people plan their finances better and keep our capital chain from breaking. On the other hand, it can reduce the pressure of single repayment and avoid consumers having to pay a large sum of money to repay consumer bills in a short time. Moreover, the interest rate of credit card bills in installments is relatively low, usually around 1% to 2%, and may even be lower than the interest rate of time deposits. According to different banks and consumption amounts, the handling fee is slightly different, but overall, the handling fee for bill installment is not high.

But the disadvantages of credit card installment bills also exist. First of all, consumers need to pay back every month. If the repayment is overdue, the bank will charge a penalty interest according to the number of days overdue, which may make the bill uneconomical in installments. Secondly, some banks will charge extra monthly service fees, management fees and other fees during the installment period, which may increase the cost of the whole installment. More importantly, the credit card bill installment essentially only replaces the original consumption bill, and the interest on the total consumption amount is still paid after the installment, and the total balance has not been reduced or exempted.

In short, for some large-scale consumption, such as travel and car purchase, credit card bills are cost-effective, which can share the repayment pressure and enjoy relatively low installment interest. Before installment, consumers need to evaluate whether it is really necessary to pay bills by installment according to their own financial situation, as well as the number of installments, interest and handling fees. In addition, it is necessary to know the relevant policies of the bank in time and decide whether to choose the bill installment after reading the contract and payment rules.