Point-of-sale financing has become the default rather than the exception. Spreading a cost
into instalments is now offered on almost everything, often with no interest, and the decision
has been made deliberately frictionless. A short set of questions restores the friction where
it is useful.
Would I buy this at the full price today?
Instalment pricing reframes a large number as a small one, and the small number is compared
against monthly income rather than against the thing’s actual worth. If the full price would
give you pause, the instalment version has not changed the cost — only its presentation.
What happens if my circumstances change?
An instalment plan is a commitment of future income, and future income is the part you do not
control. Before agreeing, find out what occurs if a payment is late: whether a deferred-interest
arrangement applies the full accrued interest retroactively, whether a flat fee is charged, and
whether the account is reported to a credit bureau. These terms vary enormously between
providers offering what looks like the same product.
How many of these am I already carrying?
Individually, instalment plans are small. The difficulty is that they are easy to accumulate
without noticing, because each is arranged separately and none appears in a single place. Four
modest plans running at once can represent a significant fixed claim on monthly income while
feeling like nothing at all.
Keep a single list of every active plan with its end date. If the list surprises you, that is
the answer to whether to add another.
