Trapped by zero-interest 3 years instalment plan
I had used the UOB credit card ‘zero-interest’ 36 months instalment plan when I bought a $2700 Smart TV at Gaincity. The salesperson had suggested going for the max. My fee waiver had been rejected twice and I began to wonder if the instalment plan had something to do with it (ref. 1).
My guess was, as you start using the credit card services and unconsciously bound yourself with the credit card company with a long 3-years credit, you are doomed.
The ‘zero-interest’ instalment ended up costing me $400 service fee (for two years).
How to liberate yourself from the instalment or credit trap
If you don’t really need the credit provided by the bank/credit card, don’t get trapped. Pay in full.
I called UOB customer service (1800 222 2121) and got the following information.
- Cancellation fee for termination of instalment plan is $150. This is cheaper than the yearly fee of $200.
- To go about cancellation, just make payment in excess (inclusive of $150 cancellation fee) to your credit card
- Call again to customer service
- Then ask to cancel the instalment plan
- To get through the call may take some time depending on the call traffic. Be patient.
Lesson learned from this case
Product salespersons may be ignorant, so don’t fall into a credit trap unnecessarily based on their unqualified suggestions. The cost can be high (especially the ‘hidden costs’).
For this experience, I have paid in access $400 fees + $150 penalty = $550 on top of the $2700. That is equivalent to 20% of the price of the TV.
After this episode, I can now decide to discontinue my credit card with UOB and start shopping for other service providers (e.g., OCBC, Maybank, POSB/DBS, Standard Chartered, CIMB, HSBC, NTUC, BOC, ICBC, and others, ref. 2).
- How to waive UOB credit card membership fee (https://siekitchen.com/2020/11/07/how-to-waive-uob-credit-card-membership-fee/)
- Compare the Best Credit Cards in Singapore 2021 (https://www.moneysmart.sg/credit-cards)