If you’ve noticed your spending has skyrocketed this month, you’re not alone. Millions of people turn to credit cards precisely because they offer flexibility in payments and different methods of financing purchases, which helps to better balance monthly expenses.
One of the most used options is the installment paymentwhich allows you to divide the cost of a purchase into several monthly payments instead of paying everything at once. However, it is important to remember that this installation generally involves additional interesttherefore it is advisable to carefully evaluate whether it is worth it.
Ways to Defer Credit Card Payments
Not all financial entities offer exactly the same mechanisms for splitting payments, and The availability of each option depends on the bank or the entity issuing the card. Among the most common forms are:
- Payment in fixed installments: This method allows you to convert a purchase made with a card into fixed monthly payments. Each payment includes a portion of the agreed principal and interest. This is a convenient option because it lets you know exactly how much will be paid each month, making financial planning easier.
- Transfer to current account: Some entities authorize the transfer of part of the credit available on the card to the user’s current account. Once this transfer is made, you can use the money freely and return it in monthly installments. This can be helpful if money is needed for various expenses or payments that do not accept cards.
- Additional credit request with split repayment: In this case, the bank grants an additional amount of credit which is returned in several installments. This is typically a formal process that requires an assessment of the customer’s ability to pay and approval from the entity.
Limits and conditions of installment payments
The number of transactions that can be deferred and the amounts available depend mainly on the relationship you have with the bank. Entities generally evaluate your solvencythat’s to say your usual ability to honor your payments, and they will establish credit and carryover limits based on this calculation.
Therefore, customers with a strong payment history and a stable relationship with the bank can access larger facilities than those with less seniority or limited financial history.
It is essential to keep in mind that Any postponement has a cost in the form of interest, which varies depending on the entity, the duration of the payment and the amount financed. Knowing this cost in advance allows you to make more informed decisions and avoid unpleasant surprises on your card statement.
How to postpone
Today, most banks offer the possibility of requesting a payment deferral through its digital platforms, either from the web or from the mobile application. This option is generally quick and convenient and allows you to calculate the monthly payment and the total number of payments in just a few clicks. Nevertheless, It is also possible to go to a physical office if face-to-face treatment is preferred or if the digital procedure is unclear.
To help users, the Bank of Spain has an online simulator that allows calculate approximately what the monthly payment, total term and interest associated with a deferral would be. This tool is useful for comparing options and better understanding the true cost of splitting a payment before committing.
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