When it is necessary to buy a good or hire a service, the possibility of doing it in installments or in cash arises. What is the best option according to the deadlines
By Ruben Ramallo
23/03/2023 – 19,40hs
In times of thin pockets, the possibility of being able to buy certain goods or services in dues It is always attractive, since it allows a payment to be deferred over time that, if made in cash, may be impossible to do so. It is well known that for a long time the program Now 12 implemented by the national government that has a valid date until the end of June of this year.
According to the plan page you can buy “all products and services must be of national production”.
They can be “purchased online and in affiliated stores throughout the country, identified by the program poster in their windows, 7 days a week, with all the credit cards with which the business is affiliated.”
The terms range from 3 to 24 months, but everything will depend on the product or service that you want to purchase.
If the current rates are compared with those applied by the different credit cards, there is no doubt that this plan is more than advantageousbut on many occasions the question arises when making the purchase if it is the most convenient or if in the opposite direction, it is wise to pay in cash.
For this purpose, there is nothing better than analyzing the conditions of the program, comparing the results for the different terms, taking an initial purchase of $1,000.
In an inflationary economy like the current one, the value of money decreases over time.
Now 12: is it convenient to pay in installments?
The first thing to keep in mind is the surcharge charged in the trade, which grows depending on the terms, but it is not precisely the nominal interest rate. It is simply a coefficient that is applied to calculate the amount of each installment.
Thus, for example, for a 3-month term, the surcharge, according to the Ahora 12 website, is 10.1%. This means that for a theoretical amount of $1,000, the fee will be $366.99, but the nominal annual rate is 63.75%, and it is the same for all terms.
For the 6 installment plan, the fee is $201.30 with a surcharge of 20.78% and so on. At first glance, whoever takes the shortest period would be the most benefited, since will be returning at the end of the same the amount of the purchase plus said surchargewhich is 10.1% and the one that turns over after 24 months will return a little more than double.
Nevertheless, In an inflationary economy like the current one, the value of money decreases over timeTherefore, the $366.99 of the first installment is not the same as said amount after the three months that this financing lasts and it is not necessary to mention the deterioration that occurs in the longer terms.
That is why it is necessary to recalculate each of the installments, taking, for example, the interest rate paid by a fixed-term bank deposit, which is currently 6.41% per month. The objective is obviously to leave aside the inflationary effect.
From a simple calculation it is concluded that the two best options are the shortest, that is, those that go from 3 to 12 installments, since the adjusted principals are $973.60 and $991, respectively, while the longest (18 and 24 months) are above 1,000 pesos.
Now 12: the interest rates that apply.
From the above, the option to choose between payment in cash or in installments is opened and the conclusions are the following: if the cash is available, one option is to place it in a fixed term and pay the installments on time, renewing the balance until full payment is covered.
If this option is chosen, at current fixed term rates, pFor Now 3 and 6, a net profit will be slightly higher than 3%, while for the 12 installments this percentage drops to less than 2 percent. For longer terms, payment in installments is clearly convenient.
Of course, everything will depend on the availability of cash and if the good or service is included in the chosen term.
