Is it better to pay in cash or in installments? Understand once and for all
Have you ever been about to make a purchase and wondered whether it was better to pay in cash or in installments? The truth is that each situation must be assessed individually, but there are some common situations that deserve attention.
In this article, we will cover all the necessary aspects to help you decide whether to pay in cash or in installments.
Pay in cash
If paying in cash doesn't give you any discount, you need to reconsider whether this is the best option. We know that every retailer bears costs related to the credit card company. Therefore, when a purchase is made in cash, it makes sense to receive some discount, which would be the money that would go to the company.
If the discount is still not an option, what you should consider is whether you have the money on hand to cover that purchase. To do this, it is also important to understand whether that purchase was included in your spending goal.
If the answer is yes and you can spend the entire amount at once, paying in full is a good option. This way, you can avoid having to make payments and not compromise the budget that hasn't even been entered into your account yet.
Pay in installments
On the other hand, installment payments are useful when you can't spend the entire purchase amount at once. In this case, it's important to keep in mind that the installments must also fit your budget. Don't create a snowball of bills that will leave you with dirty name, okay?
The most common way to pay for larger purchases is to pay in installments. Even so, if possible, it is advisable not to choose a very high number of installments, so that you do not lose track of them. This way, you maintain tighter control over your budget and avoid debt.
Cash or installments: the impact on your financial life
As we said, if you have the cash on hand to make the purchase, paying in cash may be a good idea. But first, you need to evaluate the impact of that purchase on your financial life.
We explain. Maybe you have an emergency fund of R$3,000. So, your refrigerator broke. You need a new one and there’s no way you can put off buying this appliance for too long, right?
The refrigerator you want costs R$1,500, so is it worth paying for it up front? Maybe not. If you consider that you will only have R$500 left over in the event of an emergency, such as spending on medicine or even being fired, it is very likely that you will have to resort to loans and special check.
Although there are loans with low interest rates, it is advisable to avoid taking them out as much as possible. Therefore, if you need to spend all your savings to pay in cash, it is important to carefully evaluate the conditions. It may be worth paying in installments to keep your savings safe.
Discount for advance payments
If you use a Nubank credit card, there is another option to consider: the possibility of getting discounts when you pay in advance. If you intended to make a purchase in cash, but the store doesn't give you any advantage for doing so, it's worth paying in installments without interest.
Once the purchase has been confirmed by the card, you can request an advance payment of the installments directly through the app. When using this function, the platform itself shows a simulation with the discount to be received. Very practical!
As we have seen, deciding whether to pay in cash or in installments depends on a number of factors, such as: whether there is money in the account to be spent at that time, whether the purchase will have a significant impact on the emergency fund, whether there is a discount, among others. Regardless of the method chosen, it is essential to maintain healthy financial habits to avoid debt.
Now that you've finished reading, how about understanding a little more about It is worth taking out a loan to pay off debts?
