For consumers looking to purchase big-ticket items such as electronic goods, home furnishings, jewelry, travel tickets, automobile servicing and hospital fees, banks are now offering a 0% interest rate when you use their credit cards to purchase these goods. The one thing to bear in mind however is if any of the agreed installment plan payments is not made, interest rates will be restored and other fees will be applied.

Emirates NBD has partnered with over 200 establishments to develop the “Installment Purchase Plan” for customers when they make big ticket transactions using an Emirates NBD Credit Card. You can compare the different credit card options here.

Mashreq Bank has also put together a similar deal for their customers. Their offer is valid until the end of this calendar year. Participating merchants with Mashreq’s plan span across electronics, jewelry & watches, fashion, home furnishings and others.

Oofrish Contractor, the marketing manager for Liali, had this to say about the Zero Percent Easy Payment Plan, “When you sign up for the easy payment plan on your credit card, it allows you to spread your payment over [a certain period]. Of course, after that, any non-payment of a particular monthly installment amount as per your payment cycle would definitely attract interest and late payment charges according to your bank.” John Bailey, a financial planner at Acuma Wealth Management also echoed Contractor’s view, “Don’t let them entice you into buying items which you don’t need, and essentially can’t afford, as deferring the payment will only increase problems further down the line.”

0% interest rate offers by banks are very tempting for consumers as they can purchase luxury items today, and pay later. However, it is important to keep in mind that proper budgeting must also be considered so that the consumer does not overspend and is able to cover the monthly credit card payments. In this case, the banks will apply the interest rate and also charge subsequent fees to the consumer. Financial experts are skeptical of the Zero Percent Easy Payment Plan, as it has come to be called in the market, because of this. They warn consumers of the danger and risk of incurring more debt. As always, avoid the many temptations to deviate from your budget, and use banking products responsibly and constructively.

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