How Does A Credit Card Easy Payment Plan Work?

credit card easy payment plan

Everyone knows making a purchase on your credit card that you can’t repay at month-end spells big trouble. But what if you could make a credit transaction that allows you to spread your repayments over the next few months or years, at no interest at all?

No, this isn’t a myth. In fact, such a feature may already be available on your existing card. It is called the 0% Easy Payment Plan (EPP).

What is an easy payment plan (EPP)?

An EPP is a repayment scheme that allows you to use your credit card to pay for a purchase and then repay the amount in instalments over the course of months or years.

What is 0% EPP?

A 0% payment arrangement is one which allows you to pay using the EPP at absolutely no interest charges for the entire instalment period.

How does it work?

  • If you’ve made a purchase of RM12,000 using EPP with a 12-month repayment period; your instalment amount would be RM12,000 / 12 months = RM1,000 every month over the course of 12 months.
  • By paying the instalments promptly and making sure you adhere to all terms and conditions, you would not be charged a single sen in interest during the entire period.

At present, most major banks in Malaysia have this scheme available to their cardholders, though the terms and conditions may differ.

Instalment periods differ from bank to bank, and could be as low as three months up to 36 months or more. Generally, this payment scheme are applicable only for purchases made at selected partnering outlets.

Missing any monthly instalment payment when using the EPP will lead to additional interest charges.

What are the benefits?

From a consumer standpoint, this repayment scheme offers plenty of benefits, which include:

  • The ability to pay for vital big-ticket items without incurring hefty interest charges over a period of time.
  • The option to put the lump sum which would otherwise be used to pay off the purchase in full into a fixed deposit account, hence earning interests from the banks.

Read More: 4 Times You Should Never Use Your Credit Card 0% Instalment Plan

How to sign up for EPP using your credit card?

How do you undertake this repayment facility using your card? It is actually simpler than you think.

1. First, look for stickers or signs on retail outlets indicating that they offer 0% Easy Payment Plans for your credit cards. Alternatively, look up the websites of your banks for the list of participating merchants offering this payment scheme.

2. Before making a purchase, check with the outlet on any terms and conditions you may need to adhere to. Some common ones include:

  • The categories of items that can be purchased under this repayment facility
  • The minimum purchase you need to make to be eligible
  • The instalment periods you can choose for your plan
  • Extra administrative or instalment charges you may incur to execute the plan (if any)

3. Once you’re satisfied with all the conditions binding the plan, make the purchase with your card as usual but make sure you indicate to the cashier than you’re paying using the 0% Easy Payment Plan.

4. If the plan is approved, your transaction would be authorised on the spot. Thereafter, just make sure you pay the instalment amounts promptly starting from the next bill! 

Looking for a credit card with this EPP repayment feature? Check out your available choices at our credit card comparison table!

This article was published in December 2015 and has been updated for freshness, accuracy and comprehensiveness.

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