Taking out in-store credit? Make sure you actually need it!

It might be tempting to split the payment into monthly instalments, but if you do the math you will realize that the interest rate ends up making the product much more expensive.

 

If you are one of 30% of Brazilians who takes out in-store credit to pay in installments*, remember that the tempting monthly payments usually hide exorbitant interest rates.

Let’s take the purchase of a R$1,000 LED TV divided in 24 monthly installments as an example. At the end of this period, based on an average interest rate of 5.5% per month*, you will have paid over R$3,500 – or, in other words, more than three times the original price!

Make sure you actually need to buy a new product to replace an old one and, if so, that the monthly payments fit nicely into your household budget; or pay using other types of credit to avoid buying one product and end up paying the price of three.

Source:

*SPC Brasil (Credit Protection Service)

**Average in-store credit interest rate for the electronic goods sector (August 2017), according to the National Association of Finance, Administration, and Accounting Executives (ANEFAC, acronym in Portuguese)

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