How Does a Credit Card Installment Plan Work in the Philippines?

Credit cards offer numerous perks such as exclusive discounts and privileges and installment payment plans. These credit card installment plans usually come with little to no interest, longer repayment periods, and equal monthly payments. Most banks in the Philippines even offer a payment term of your choice to sweeten the deal.

But is it really a good idea to avail of a credit card installment plan? Should you extend your credit card payment and stay in debt longer? When is credit card installment beneficial? 

In this article, we’ll answer all your burning questions about credit card installment, including its pros and cons, before you use it to pay for your next purchase.

What is a Credit Card Installment Plan?

A credit card installment plan is a scheme that enables cardholders to pay for their purchases in equal amounts monthly. Instead of making a one-time cash payment or a straight payment with your credit card, you pay an equal amount for a certain number of months. 

You can choose to pay in fixed payment terms of three, six, 12, or 24 months. This allows you to divide the entire purchase amount depending on your preferred installment term. 

Note that a credit card installment plan is not the same as a Buy Now, Pay Later (BNPL) plan. However, some credit cards offer a BNPL feature, with which you can choose to defer your payment for up to 90 days. 

How Does a Credit Card Installment Plan Work?

A credit card installment plan is a popular payment option for those who may not have enough money to pay for their purchases in cash. For instance, you need a new inverter refrigerator that costs ₱25,000, but you don’t have enough cash to make an outright purchase. You can charge it to your credit card, choose a payment term that works for your budget, and pay for it in installments. 

The merchant will swipe your credit card and set up the installment payment scheme. Before completing the transaction, the merchant will inform you of your monthly payment amount. Once you agree to the payment terms, the transaction will be confirmed and the purchase will be processed. 

What Can You Buy on a Credit Card Installment Plan?

One of the most attractive features of credit cards is the credit card installment plan, which allows you to buy items that cost a bit of money through split payments. You can purchase high-value items like home appliances, furniture, and gadgets and pay in affordable installments. 

Moreover, you can make a straight charge on your credit card to purchase plane tickets, for example, and convert your payment into affordable monthly installments. 

What are the Advantages of Credit Card Installment Plans?

There are many credit card installment benefits. Here are just some of them:

👍 Buy Expensive Items

Credit card installment allows you to buy big-ticket items without draining your cash flow. The goal is to save the cash you have on hand and spread out payments over three to 24 months. So if you’re going to buy a new phone that costs ₱50,000, you’ll pay ₱4,168 every month for 12 months. 

By opting for a credit card installment, the partner merchant can process everything for you. All you have to do is wait for the first installment to be posted on your billing statement and pay on or before the due date.

👍 Use Your Cash for Other Purposes

Cash is king, so it’s good to have it readily available for any financial emergencies. Without cash, you’d be tempted to borrow money even with high interest and fees. 

With credit card installment plans, however, you can leave your cash untouched. You can use it for business or other more urgent expenses.

👍 Earn Rewards

Although not all credit cards let you earn points from installment plans, most still allow you to rack up points for direct or installment purchases. Before heading to the store, call your credit card provider and confirm if your installment purchase can qualify for the bank’s regular rewards program. 

👍 Enjoy Deferred Payments

Some banks offer Buy Now, Pay Later, or BNPL, which allows you to delay your payment. This feature also allows you to grab great limited-edition deals and pay for them at a later date. 

👍 Secure Shopping Experience 

While neither is a pleasant situation, losing your credit card is less risky than losing a large amount of cash. There’s a slim chance of retrieving stolen cash, but unauthorized purchases on your credit card can be investigated and reversed.  

👍 No Need for a Down Payment

Unlike installment plans offered by lending companies where you have to pay an initial amount of up to 20% of the purchase price, you don’t need to make any down payment with credit card installment plans. 

👍 Deal with Debts

Use credit card installments to manage your debts. If you carry a high credit card balance, the bank may give you the option to pay it off in installments. 

Some banks offer balance transfers wherein your existing credit card balance will be transferred to a new credit card with a low interest rate. You can then opt to pay the consolidated balance in installments. 

Read more: Money-Saving Credit Card Hacks in the Philippines You Should Check Out

What are the Disadvantages of Credit Card Installment Plans?

There's also a bad side to credit card installment plans. Keep these in mind:

👎 No Rewards for Installment Purchases

Depending on the credit card, most issuers don’t allow you to earn points with installment purchases. If you’re a reward-seeker, then credit card installment plans probably won’t be your thing. After all, since your bank will shoulder the full expense, you essentially owe them money. 

👎 Encourages Overuse 

This will depend on your discipline and attitude toward credit card usage. Credit card installments can be enticing because some offers don’t have interest, which may tempt you to constantly buy on credit. Eventually, you may find yourself overusing your card. 

👎 No Discount on Your Purchases 

A lot of shops and retailers offer discounts when you pay in full with cash, which means savings on your end. But if you decide to pay in installments using your credit card, you won’t enjoy the same privilege.

👎 Another Monthly Payment to Worry About

Before you avail of credit card installment plans, assess your ability to juggle monthly payments. Don’t risk it if you think you’re not ready for it. Consider the number of bills you’re currently paying. You’ll always have utility, internet, and phone bills to worry about. Can you afford to worry about another set of monthly bills? 

👎 Your Financial Future is Uncertain

Nobody knows what the future holds. You can’t predict the next emergencies that might hinder you from paying your installments. This may include medical expenses, unemployment, or bad business profits. If you don’t feel confident about your financial capacity one month from now, avoid credit card installment plans for a while.

👎 Purchases Can Become More Expensive

Although credit cards usually offer 0% interest on installment plans, there are instances when you still need to pay processing fees and interest. And if you choose a longer installment term, you’ll also need to cover the interest for longer. 

Some stores even offer different pricing for cash or straight purchases versus installment purchases. Credit card issuers may also charge early processing fees if you opt to pay for installment charges before the end of its term.

Is a Credit Card Installment Plan a Good Choice? 

There are some situations where credit card installment plans aren’t practical. Here are some of them: 

• You’re close to maxing out your card. If you exceed your credit limit, you’ll need to pay overlimit fees.
• You have the means to pay for the item in full. Paying in cash will spare you from the hassle and stress of monthly payments. 
• You’re in a financial mess. If you’re dealing with debt, it doesn’t make sense to accumulate more of it. 

Read more: Take Back Control: Credit Card Amnesty Program in the Philippines

12 Best Credit Card Installment Plans in the Philippines

Credit card issuers in the Philippines offer installment plans with different terms and conditions. Here are a few of the best installment plans to consider when you’re choosing a credit card:

👉 UnionBank’s Inhouse Installment Facility

Inhouse Installment is UnionBank credit card’s installment program. Through this, you can make big purchases and enjoy lighter monthly payments. Keep in mind that all Inhouse Installment requests are subject to the bank’s approval.

This particular program has the following features:

• EasyConvert – Whether you’re buying groceries or a brand-new TV, use this feature to convert your straight purchases into fixed monthly installments.
• EasyCash ­– Got an emergency? Convert your credit limit into cash that you can use for unexpected expenses. You’ll then pay the loaned amount in monthly installments.
• EasyTransfer – This feature is designed to make credit card debt payments much easier. EasyTransfer allows you to transfer your other credit card balances to your UnionBank credit card and pay for everything in monthly installments.

Check out some credit card options from UnionBank:

UnionBank Rewards Credit Card

• No annual fee forever if you apply and get approved on or before October 31, 2023^[1]
• Maximum rewards benefits:
  • Earn 1 never-expiring point for every ₱30 spend
  • 3x points when you shop and dine here and abroad
  • Use your points to redeem cash credits, gadgets, merchandise, and more
• Worry-free payments with 0% interest installment plans
• Automatically charge your utility bills monthly via PayBill
• Free life insurance coverage up to ₱400,000 of your outstanding balance

UnionBank Classic Visa Card

• Up to 36 monthly installment terms at 0% interest
• 1 rewards point for every ₱35 spend

UnionBank Gold Visa Card

•  0% interest installment payment plans
• 1 rewards point for every ₱35 spend

👉 HSBC Credit Card Instalment Plan

Use your HSBC credit card to purchase costly items online or in-store at 0% interest for up to 36 months.^[1] No need to pay for additional costs―HSBC doesn’t charge interest. This credit card installment plan applies to both online and in-store purchases as long as the items are bought from HSBC’s partner merchants. 

Depending on the merchant, there’s a minimum spend requirement for the installment plan. Some shops will even let you combine different items for you to reach the minimum purchase amount. 

If you’re an HSBC credit cardholder with good credit standing, you’re eligible for this bank’s credit card installment plan.

Check out some credit card options from HSBC:

HSBC Red Mastercard

• 0% interest installments of up to 36 months
• 4x reward points on online, shopping, dining, and overseas spend

HSBC Gold Visa Cash Back

• 0% interest installments of up to 36 months
• 5% cash back on dining and 0.50% cash back on all other spend

👉 Metrobank Credit Card Installment Plans

Metrobank has installment programs that cater to both shoppers and credit cardholders dealing with balance payments: 

• Merchant- or promo-related installment programs – Metrobank has partnered with different merchants to offer 0% interest credit card installment plans of up to 24 months. These include Gigahertz, Datablitz, Automatic Centre, Robinsons Appliance, Samsung, Western Appliances, Ayumi Japan Eyelash, and The SM Store, just to name a few.^[3]
• Metrobank Easy Installment – If you’re dealing with a hefty credit card balance, this plan lets you convert your balance into easy monthly installments. You can apply for a payment term of up to 60 months. The monthly interest for all terms is 1%.

Check out some credit card options from Metrobank: 

Metrobank World Mastercard® 

• 1 rewards point for every ₱20 spend
• 2x points for international purchases
• 50% off dining offers at participating merchants
• Lounge membership and exclusive airport discounts at more than 1,000 airports and 500 airport lounges worldwide

Metrobank Platinum Mastercard® 

• 1 rewards point for every ₱20 spend
• 50% off dining offers at participating merchants
• Automatic worldwide insurance for online purchases with e-Commerce Protection

Metrobank Titanium Mastercard®

• 2x rewards points on dining, department store, and online purchases
• 1 rewards point for every ₱20 spend
• E-commerce protection

👉 Security Bank Credit Card Installment Plans

Security Bank’s credit card installment program offers features that make payments simpler and lighter. Check out the following:

• ChargeLight – Convert your transactions into light installments with a 1% add-on rate (regardless of your chosen payment term) or 0% interest, depending on the merchant or available promo. 
• SimplyPay –  Use your Security Bank credit card to pay bills and other expenses that require a bank deposit, such as school tuition, professional service fees, and rent. The add-on rate is 1% regardless of your chosen payment term. Choose from three, six, nine, or 12 installment payments.
• Ready Cash – This allows you to convert your available credit limit into cash and pay in monthly fixed installments. Use this for emergency expenses. 
• Balance Transfer – Pool all your credit card debts together and transfer them to a Security Bank credit card. 
• Bills Assist –  This consolidates all your utility bills, so you’ll have to remember only one due date.

Check out some credit card options from Security Bank: 

Security Bank Gold Mastercard

• Installment of up to 12 months
• 1 rewards point per ₱20 spend

Security Bank Complete Cashback Mastercard

• 5% cash back on groceries, 4% on fuel, 3% on bill payments, 2% on dining expenses, and 1% on shopping
• Exclusive access to Marhaba Lounge at NAIA 1 and 3

👉 BPI Special Installment Plan

Bank of the Philippine Islands (BPI) has an installment program called Real 0% Special Installment Plan (SIP). With this, you can get up to 36 months real 0% interest when you purchase from the bank’s partner merchants.  

If you’re more of an online shopper, BPI’s Online Special Installment Plan is worth checking out. You can enjoy 0% installment for up to 24 months with the bank’s online partner merchants.^[2] 

Available terms, however, may depend on the merchant. Participating brands include Power Mac Center, Anson’s, Abenson, The SM Store Call to Deliver, ShopSM, Henry’s Cameras, Trunc, Western Appliances, Cole Haan, and Time Depot, among others. 

BPI credit cardholders with good standing are also qualified for the Bonus Madness Limit. This is a bonus installment credit limit of up to 100% of the regular credit card limit.

Check out some credit card options from BPI:

BPI Amore Cashback Card

• 0% interest installment plans
• Up to 4% cash back on supermarkets and department store spend

BPI Rewards Card

• Flexible installment plans with terms of up to 36 months
• 1 reward point for every ₱35 spend

👉 RCBC Unli 0% and Unli Installment Programs

If you’re looking for a credit card installment plan that doesn’t require any minimum spend, then use an RCBC credit card.

RCBC offers UNLI 0% and UNLI Installment^[4] options, both of which can be availed of with no minimum spend and as often as you wish. You can convert all your overseas purchases, too.  

Go for UNLI 0% if you plan to keep your payment term short. This lets you enjoy 0% installment for three months.

On the other hand, apply for UNLI Installment for longer payment terms of up to 36 months. Interest rates are minimal.

👉 AUB Credit Card Installment Plans

You shouldn’t be sleeping on Asia United Bank (AUB)’s credit cards. Their benefits and perks can go toe to toe with those of bigger banks. That includes its credit card installment program.

AUB’s credit card installment program includes the following features:

• Flexi Pay Installment – Use this to avail of 0% interest on installment terms of up to 36 months with a minimum spend of ₱3,000. 
• Post Pay Installment – This lets you convert your straight purchases with your AUB credit card into installments with an add-on rate of 1%. Choose from six- and 12-month payment terms. 
• Balance Transfers – Use this to consolidate credit card balances. Transfer your other credit card balances to an AUB credit card and pay the total balance in installments with an add-on rate of 1%. You can also choose from six- and 12-month payment terms. The minimum transaction amount for this facility is ₱3,000. 
• Cash Out Installment – Need quick cash for unforeseen expenses? Get cash using your AUB credit card and pay the amount in installments with an add-on rate of 1%. Just like other AUB programs, this credit card installment plan comes with six- and 12-month payment terms. 

👉 Robinsons Bank Credit Card Installment Plans

Robinsons Bank’s credit card installment plan makes shopping and debt payments easier with the following features:   

• Convert to Cash – Convert your available credit limit into cash to pay for your needs. You can choose to receive the proceeds via your savings or checking account.
• Balance Transfer – Transfer your other credit card balances to your Robinsons Bank credit card and pay the new balance in monthly installments.
• Transaction Conversion – Convert your straight payment with your credit card into monthly installments. The required minimum purchase is ₱3,000.
• Balance Conversion – If you have a large credit card balance, convert it into monthly installments for easier payment.

Read more: How to Check Credit Card Balance: 5 Easy Methods

👉 PNB Installment Programs

The credit cards from the Philippine National Bank (PNB) come with the following installment programs: 

• Zero % Affordable Payment Plan (ZAPP) – ZAPP lets you avail of 0% installment of up to 24 months when you shop at PNB’s select partner merchants. 
• Transaction Conversion – Convert your straight payments into installments with low interest rates. 
• Balance Transfer – Transfer your existing credit cards’ balances to a new PNB credit card to pay them on one due date at low interest rates. 
• Convert-to-Cash – Deal with emergencies and unexpected expenses by converting your credit limit into cash and paying the loan in light installments with low interest rates.  

👉 LANDBANK EASY PAY PROGRAM 

If you have a LANDBANK credit card, you can use it to avail of the EASY PAY PROGRAM. The said installment facility lets you convert retail transactions into monthly installments of up to 24 months. 

The minimum valid amount for this program is ₱5,000. On the other hand, the maximum amount is subject to the card’s available credit limit at the bank’s discretion. The interest rate is 1%, regardless of the loan tenor. 

👉 PSBank Credit Mastercard Installment Plans 

The PSBank Credit Mastercard, which is accepted in more than 23 million outlets worldwide, comes with the following installment programs: 

• 0% Installment Program  – This lets you pay for big-ticket purchases and expenses such as appliances, hospital bills, and travel fares in monthly installments at 0% interest. You can choose from three- to 24-month payment terms.  
• Balance Transfer – Consolidate your credit card balances by transferring them to a new PSBank credit card. Pay them off in installments available in six-, nine-, 12-, 18-, and 24-month payment terms. 

👉 Bank of Commerce Credit Card Installment Plans 

Bank of Commerce’s credit cards may go under the radar, but they’re loaded with features and accepted in more than 30 million establishments worldwide. The bank’s credit card installment plans include the following: 

• Installment Plus  – With this feature, you can shop at select establishments and avail of installment offers with an interest rate as low as 0%. Choose from the following terms: three, six, 12, 18, 24, and 36 months. 
• Cash Loan – Through the Bank of Commerce Cash Installment Credit Card, you can avail of 100% of your approved credit limit payable in 12, 24, and 36 months at low interest rates. 

If you're looking for credit cards with low interest rates, you can also check these out:

Credit Card	Installment Perks
UnionBank Rewards Credit Card	0% installment terms of up to 36 months with UnionBank PayEasy
UnionBank U Visa Platinum	0% installment terms of up to 36 months with UnionBank PayEasy
Metrobank Titanium Mastercard®	0% interest installment plans of up to 36 months at partner merchants
Metrobank Platinum Mastercard®	0% interest installment plans of up to 36 months at partner merchants
HSBC Red Mastercard	0% interest for up to 36 months with the Card Instalment Plan
BPI Edge Card	BPI Real 0% Special Installment Plan

Credit Card Installment FAQs

Now that you understand how credit card installments work, here are additional tidbits to help you understand this feature more: 

1. What is the difference between credit card straight payment, credit card installment, and Buy Now, Pay Later? 

Credit card straight payment, credit card installment, and Buy Now, Pay Later are the same because they allow you to buy something with money that you don’t currently have.

Here’s how they differ from one another:

A straight payment with a credit card is a financing scheme where you purchase something on credit and fully pay the borrowed amount on your next billing. 

A credit card installment, as explained earlier, is a set-up where you buy something with your credit card and pay the borrowed amount in installments, usually in monthly terms.  

Buy Now, Pay Later or BNPL, meanwhile, is a financing scheme that allows you to purchase something on credit and delay the payment for up to 90 days, depending on your agreement with your creditor. Sometimes, BNPL is a credit card feature, but it’s also offered by non-bank financial firms, such as the likes of Home Credit, Atome, UnaPay, and more.

2. How to apply for a credit card installment plan?

Applying for installment via credit card is easy because partner merchants can automatically convert your purchase into split payments of your choice. However, for other types of installment promos, reach out to your bank to request an installment plan. 

To make sure you can avail of a credit card installment plan, make sure you:

• Have no outstanding or unpaid balances
• Did not max out your credit limit
• Have enough credit card balance to cover the purchase amount
• Can pay the monthly charges
• Agree to the terms and conditions and pay all related costs and charges

3. How to pay a credit card installment?  

Since the price of your purchase is divided into installments, it becomes part of your monthly credit card bill until it’s paid in full. You have a few options when paying your credit card installment:

• Over-the-counter transactions at the bank (cash or check)
• Over-the-counter transactions at the bills payment center
• Auto-debit arrangement
• Online banking
• Mobile banking
• Mobile wallet apps (e.g., GCash, Maya, or Coins.ph)

4. Can I pay my credit card installment in advance?

Yes. Doing so will help you save money on interest, fees, and other charges.

Final Thoughts

Just like most things in life, credit card installment plans come with their own set of pros and cons. The challenge now is to determine how you can use it to your advantage. 

If you have a regular source of income, then avail of a credit card installment plan for your purchase. However, if you think your sources of income are unstable, then you may not want to take the risk and just pay in cash. 

Weigh your options and consider possible scenarios before you get an installment plan. This should apply to any financial decision you make.

If you’re looking for credit cards that offer installments, compare your options using the Moneymax platform. Once you’ve found the card for you, apply for it right away.

Sources:

• ^[1] HSBC Card Instalment Plan 
• ^[2] BPI Online Special Installment Plan 
• ^[3] Metrobank Credit Card Promotions
• ^[4] Unli 0% and Unli Installment