I got a nasty shock today after checking my credit card bill. I've been charged with an 'Admin fee' of about $90 for using a 6 months interest-free instalment payment plan. I've never in my life paid via credit card instalment plans. I've never research on what it means to pay interest-free but as an accountant, my instinct has always told me that there has to be some catch. Banks will never do something for free, they will suck your money dry and then spit you out and leave you to die before they ever consider giving anything for free.
So this 'interest-free' instalment actually cost more than if you were pay anything together with interest! I had charged $3000 to the card. So $90 admin fee meant I was paying 6% per annum rate for the instalment. With interest rates on deposits at a meagre 0.02% per annum ... imagine the margin they are making on this scam. I knew it was bad ... but never really saw it was this bad.
Sadly, my instincts failed me for the very first time and I fell into the trap. I suppose I had a lot on my mind when the lady at the counter offered the instalment plan on the delivery deposit while we were checking into Thomson for Meimei delivery. It's not like I didn't have the funds to pay, but somehow in that moment, Meimei and I agreed foolishly on the instalment proposal.
Meimei was pretty unhappy about it too when I told her the cost of the instalment plan. Well once bitten twice shy, we both now know the actual cost of interest free plans. Never again will banks take another cent from us through such devious schemes.
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