Interest-free installment cards as a financial tool

How interest-free installment cards work

The working principle of payment instruments is roughly the same for all banks. It consists of a simple scheme:

• The applicant submits an application for the card online or at an office.
• The financial institution reviews the application within 10–15 minutes and makes a decision, approving the specified limit or setting a different one.
• The payment card is sent to the applicant in the specified way or handed over in person.

After receiving the card, the owner can buy goods within the established limit.

The point of providing an installment card is that financial institutions enter into partnership agreements with other companies. In these networks, cardholders can make purchases at face value, returning funds to the bank in installments. The benefit of the deal is that with the help of installments, stores increase the volume of goods sold and revenues. Accordingly, banks receive certain commissions for this.

Please note! Not all product items fall under installments. They indicate the cost of the product + the number of months of installments. If such a price tag is missing on the selected product, it means the product does not fall under the program. You will not be able to buy it using a card with a loyalty program.

Is it profitable to order interest-free installment cards? Let's do the math

For example, a PC monitor costs 20,000 RUB with an installment plan for 10 months. The amount is paid in equal installments. This means you will have to pay 2,000 RUB every month. That is, the cardholder does not overpay either to the bank or to the partner store.

Installment cards allow early loan repayment. This can be done either the next day or in 2–3 months. In any case, the amount will not change. Making a minimum payment is a mandatory condition.

Note! If the contract terms are violated, the installment card "turns" into a regular credit card, which accrues penalties on the balance.

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Features of the banking product

The main feature of bank cards is the ability to purchase goods without additional commissions and overpayments. By properly distributing the financial burden, in some cases you can use an installment card for interest-free cash withdrawals.

Plastic also has other features that can be considered advantages of the product:

• Versatility. The card combines credit and debit functionality. There are cash back accruals and interest on the balance.
• Large selection. The applicant can choose a card that suits their needs.
• Long service life. Plastic needs to be reissued every 5–10 years.
• High-quality online support.
• Modifiable limit in the upward direction for loyal users.
• The ability to buy several goods at once within the established limit.

Installment cards are more accessible compared to credit cards. Banks refuse citizens who do not fit the age requirement or are in places of detention. Difficulties in obtaining a card may arise for clients with a "black" credit history.

Types of interest-free installment cards. Current offers on the domestic market

Not many banks issue installment cards. We will provide a brief overview of popular products and suggest alternative options.

• Halva from Sovcombank with a credit limit of up to 350,000 RUB

The holder of the "Halva" card has the opportunity to purchase various goods in the bank's partner stores without interest: building materials, household appliances, groceries. Card issuance and maintenance are free of charge. The maximum installment period is 18 months. By connecting special tariff plans, the payment period can be increased. For purchases with your own money, the bank accrues cash back from 1% to 6%. Halva is not an installment card with interest-free cash withdrawals. A commission of 2.9% + 290 RUB will be charged for withdrawing borrowed funds. You can withdraw your own money without commissions.

• Sovest from Qiwi Bank with free maintenance

Plastic with a limit of up to 300,000 RUB. Issuance, reissuance of the card at the initiative of the financial institution and SMS-info are free. There are no commissions for early repayment, and the installment period is dictated by partner stores. It ranges from 1 to 12 months. There are penalties for non-payment of the monthly installment (699 RUB) and a fine for breach of contract (10% per annum).

• Home Credit Bank installment card — "Svoboda"

If you buy goods in partner stores, the bank provides installments for up to 12 months. The grace period for purchases everywhere is up to 51 days. You can purchase goods during this period at 0%. Home Credit Bank offers maximum freedom for loyal clients and increases the credit limit. The card is delivered by a courier, and maintenance is free.

As for alternative options, the Alfa-Bank 100 Days Without Interest credit card with a credit limit of up to 500,000 RUB can fully replace an installment card. If you need no more than 100,000 RUB for purchases, the Kviku virtual card is an excellent choice. It is issued online in a few minutes and provides a grace period of up to 50 days. You can buy goods without interest by applying for a card with an allowed overdraft MEGACARD and a limit of up to 500,000 RUB. The card has a bonus program that allows you to receive points from each purchase.

How to choose a profitable installment card

To use plastic with a loyalty program effectively, pay attention to the following nuances:

1. Installment duration. The largest period is offered by Sovcombank on the "Halva" card. For other plastic products, it is significantly lower.
2. Credit limit. If it is 350,000 RUB on the card, regular and responsible clients can count on it. For other users, the credit amount depends on the information provided in the application. With timely replenishment of the account, its increase is possible.
3. Number of partner stores. For example, Sovcombank has concluded agreements with more than 100,000 companies and their number is growing every year. The wide service geography makes it possible to use bank cards anywhere in the Russian Federation.
4. Availability of additional bonuses. To multiply funds and retain customers, banks introduce profitable loyalty programs. For example, for purchases, you can return a certain amount of funds with bonuses or get interest on the balance. There are cards that combine these two functions.

Read the terms of obtaining cards. Choose a suitable option using our service.