Credit cards: when should you buy in installments?

Many times we resort to credit cards when we do not have the money enough in case of an emergency. On some occasions, we also use them to carry out purchases, and many times we choose pay in installments; But, do you know when it is more convenient to do it?

According to the Association of Banks of Peru (Asbanc), first the user must take into account that all purchases in installments that you execute with a credit card will generate interest.

Then, you can use this option to acquire something that is necessary, such as a computer to work or study, an appliance that you have to replace or another good that you really need and at the moment you cannot afford.

Along these lines, the union advises that it is not advisable to negotiate recurring expenses in installments, such as food for the month.

Therefore, if you still need to do some consumption with your card, either because you do not have the cash to pay in cash or for some other reason, the Asbanc suggests the following:

– Consumption in restaurants, buying food or clothing is better to pay in a single installment, so they will not generate interest.

– You can finance vacations more or less in the number of months it would have taken you to save for them. Try not to be more than 12 quotes.

– Large expenses, such as electrical appliances or technological equipment, could be financed in more than 12 months, but it is recommended that the number of installments does not exceed the useful life of the asset.

Ideally, you can plan the amount of the installments that you can pay monthly, before making the purchase. Less fees, less interest and commissions.

Finally, the Asbanc advises to take into account two important points, if you are ready to apply for a loan or a credit card:

– Gross income: is all income before taxes; that is, your salary, commissions and other verifiable income.

– Net income: it is the money you receive after having subtracted the taxes that apply to the work activity that you carry out, such as income tax, fourth category tax and any other to which you are subject; as well as the law discounts such as AFP.