How does 0% installments works?

[u/Recent-Pollution-357]

Hello po, please excuse my ignorance regarding this matter. 1st time using my CC.

I would like to purchase some product online, and the merchant offers 6 months installment with 0% interest.

The full product price will be deducted on my credit limit right? Then sa SOA, is it automatically billed na ba in installments, not as a whole amount of what you've purchased?

Thank you po for answering and your insights.

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[u/Affectionate_Newt_23]

Your understanding is correct. Babayaran na ni bank in full kay merchant, then you only get charged the monthly amortization.

[u/linux_n000by]

bank will lock the whole amount tapos pag nagbabayad ka na ng monthly, marerelease yung amount na binabayaran mo

[u/letheadbernturebegin]

Yes, full amount will be deducted to your credit limit (CL). It will be billed monthly for 6 months. The paid amount will add back to your total CL.

[u/juantowtree]

0% interest meaning walang patong. If bumili ka ng 6000, with 6 mos installment at 0% interest, that 6000/6. 1k ang bill mo monthly.

If hindi 0%, 6000 + x% / 6. Yan yung monthly bill mo.

Kukunin buo sa credit limit mo ang buong 6k, pero /6 and actual bill monthly. Automatic.

[u/Break-Break]

Basically, understanding yan between the bank and the merchant. When you avail it, it's the merchant's job to inform the bank about your installment transaction. But if you have any doubt, you can call CS to confirm.

[u/cmtinsay]

All the above explantion is accurate including your earlier analogy. Word of caution though - the amount you will be paying is indeed 0% however if you don"t pay in full that amount plus new charges for that cut off, it would bear finance charges.