An installment card may be useful. However, if you do not return the money to the bank on time, interest will be charged on the debt. Speaking to socialbites.ca, Natalya Demidova, an expert in the payment systems and payments department of the Main Directorate of the Central Federal District of the Bank of Russia, said that this is the first restriction on such cards.
“By law, both credit cards and installment cards are “cards with a credit limit”. Overdraft is essentially the same loan. The working principle of credit cards with long grace periods and installment cards is similar: There is an amount of money available on the card, and you can use it to buy something and then pay off your debt by making a payment. The expert said that if you do not pay the money on time, the installment plan will turn into a loan with a certain interest rate, just like if you do not meet the grace period of a credit card.
In addition, installment cards, unlike credit cards, have two more restrictions – you can spend money on them only in partner stores of the bank and cannot withdraw cash, explained Demidova.
Installment cards appeared in Russia at the end of 2016 – beginning of 2017. Then Qiwi Bank’s “Conscience” and Sovcombank’s “Halva” projects started. Konut Kredi Bankası launched the installment card in the second half of 2017. In 2018, Alfa Bank, Russian Standard and Vostochny Bank entered the market with similar projects.
He previously worked as an expert at the NIFI portal of the Ministry of Finance named Five rules of using credit cards.