PURCHASE, N.Y.—In an effort to help customers control their budgets and manage their finances, MasterCard is launching a new installment payment program in several European countries later this year.
Large purchases, such as TVs, car repairs, and medical bills, can be split up into installment payments instead of monthly lump sums, so consumers have an easier way to pay for significant transactions on their credit cards.
“Participants can sign up for the installment services through their card issuers, but the installment agreements will not take place until the time of purchase,” explained LowCard.com’s John Oldshue. “Customers will be prompted to choose their payment method for each of the items in their transaction, or they can roll them all together onto one installment plan.”
Oldshue explained that these flexible payment solutions are designed to help shoppers better manage their funds without having a large bill to cover at the end of the month.
“Of course, consumers can still make installment payments on traditional credit card bills, but paying off a credit card slowly can cost the cardholder a lot of money in interest,” he said.
The program is only a pilot, so Oldshue said it may work its way to the United States if there is enough success in Europe.
“Amazon has already launched a similar service in the U.K. for items over $565,” explained Oldshue. “Amazon essentially opens a loan for the value of the product, with monthly payments spanning over two to four years.”