Laughing and crying with 0% interest installment purchase

Many experts recommend that buyers who pay in installments with 0% interest via card must carefully study the process before making the transaction.

Retailers have noted that since the implementation of the 0% interest rate program, the average value of orders has increased significantly because customers are more willing to spend money than paying in cash. However, due to the simple procedure, only requiring a credit card, many cardholders who buy on installments have inadvertently skipped the necessary steps.

Buy in installments and pay in full

Mr. Ngo Minh Nghia (District 11, Ho Chi Minh City) said that because he was attracted by the 0% interest loan purchase programs, he decided to change his phone. In January 2018, he went to an e-commerce site to buy an iPhone X 256GB for 27 million VND in installments over 12 months via credit card, he only had to pay 2.3 million VND per month.

However, in July, Mr. Nghia discovered that his credit card account was being fined up to 3.2 million VND in interest. When he contacted the bank, Mr. Nghia was shocked to be informed that the 27 million VND paid by credit card to buy a phone was considered a one-time payment, not an installment payment.

"Because I didn't know, I still paid monthly according to the instructions of the 0% interest loan, so every month I was fined 600,000 VND in late interest. By the time I discovered it, the late interest had increased to more than 3 million VND" - Mr. Nghia said, adding that he had contacted the seller but was refused to resolve the issue on the grounds that the customer did not understand the payment process.

Similarly, Ms. Thuy Dung (residing in District 7) said that a few months ago, she chose to buy a fitness package at a center for 9 million VND/year in installments with 0% interest. The company's sales staff came to her workplace, holding a POS machine for Ms. Dung to swipe and advise on the procedure to switch to installments, and affirmed that a week later the bank would notify her of the completion of the procedure.

However, after nearly 2 months of not receiving any notification, Ms. Dung called the bank and learned that she had to contact the bank herself to register for installment payments. "The seller just wants to attract customers, while not everyone has enough financial knowledge to understand clearly," Ms. Dung said.

Must grasp conversion procedures

According to e-commerce expert Nguyen Thanh Long, if buying online, customers must choose "installment payment" on the website of the service or goods provider when making the final payment step. After that, the service provider will forward the request to the bank. The customer service department will contact the customer to confirm the request and the monthly installments that the customer needs to pay.

On some other e-commerce platforms, to use the 0% interest installment purchase package with banks that are associated with the platform owner, customers only need to click the "Received goods" button on the platform after receiving the goods and checking the product. Then, the customer's order will be automatically sent to the bank for installment conversion. Some banks will require customers to fill out an online form to complete the installment registration form. Customers are not allowed to return the goods after the transaction has been successfully converted to installment payment.

Because the procedure is simple, only requiring a credit card, many cardholders who buy on installments have accidentally skipped the necessary steps.

A bank representative said that each business sets different conditions and procedures for customers to participate in the installment purchase program. But with online shopping, customers must choose "Installment payment method" when they want to use the 0% interest installment package.

"Depending on the bank, but usually after 5 working days from the date of purchase, customers must contact the bank's customer service department to register for installment payments, and only then will the entire purchase transaction begin to be converted," he said.

According to financial experts, customers using 0% interest installment payment services need to understand that when purchasing in installments, the available limit on their credit card will be deducted by an amount equal to the transaction value and will gradually increase corresponding to the installment amount that the customer has paid over the periods. Therefore, after making a transaction, it is necessary to proactively monitor the account balance and periodically check the interest rate to avoid cases of being penalized with interest in case the payment has not been converted into an installment package.