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Here’s Why Circles.Life Needs To Stop Advertising Its 0% Interest iPhone Instalment Plans

Does Circles.Life have the responsibility to educate their customers about the ins and outs of a credit card interest-free instalment plan?


Ever since launching in Singapore last year, Circles.Life has been nothing if not bold and aggressive in its marketing efforts. Think what you like about their “fight data deprivation” campaign, it did get plenty of attention on their unique selling proposition of massive data offerings.

The recent iPhone X launch sparked renewed excitement in phones not seen in a long time. With it, a large wave of Singaporeans looking any and all ways to get the latest and greatest Apple has to offer. Riding on this wave are resellers on Carousell, banks, and of course, telcos.

Of course, its hard to differentiate yourself when the iPhone X you’re selling is the exact same product that your competitors are selling, so Circles.Life have been touting the fact that you can pay $0 upfront and get your iPhone X from them on an interest-free instalment plan.

This is where the problem lies.

Read Also: Getting An iPhone 8, 8 Plus Or X? Here’s How Local Mobile Price Plans Compare

Circles.Life’s Interest Free Instalment Plan Is Actually A Credit Card Instalment Plan

You see, the interest-free payment plan that Circles.Life offers customers is actually a interest-free instalment plan that customers will have with their credit card company. You probably already know that. But what you should also know is the implications this will have on customers or customers-to-be.

Here are some of the most serious consequences that people thinking of taking up such a credit card instalment plan should know about:

Your Available Credit Limit Will Be Lower

For instance, the full cost of the iPhone ($1,648 for the base mode) will be parked under your credit limit, decreasing gradually as you make your monthly instalment payments. If you plan to pay for a holiday or have other spending needs in the next two years, you will have a lower spending due to the outstanding amount still owed.

If You Are Late In Your Payments, Expect Hefty Late Fees and Interest Charges

Another implication is the gravity of having to pay $68.67 a month over two years. It is by no means a small financial commitment. By advertising aggressively to students or young adults who want a phone but have not yet done careful budgeting and cashflow projections, the danger is that dozens or even hundreds of young Singaporeans will miss payments in the months to come and be slapped with heft credit card late-payment fees.

Lack Of Rewards Like Cashback Or Miles For This Purchase

Unlike charging normal purchases on your credit card, you won’t get the benefits of the usual credit card rewards when you take up a monthly instalment plan. That’s kind of a bummer, since you’re going to be spending the same thousand dollars any way.

You Can’t Cancel Your Credit Card For The Next Two Years

Do you remember the credit card company giving you free gifts and a first year membership waiver? Well, now that you have an outstanding two-year payment plan with them, you are stuck with them until you finish paying what you owe. Good luck getting an annual fee waiver when the time comes. The credit card company knows you’re tethered to them and have no real incentive to waive your fee. There are also extra fees to pay if you want to finish your repayments early, adding to your already extensive expenditure.

Not Being Able to Pay On Time Will Affect Your Credit Score

Late credit card payments will have a negative impact on their credit scores, affecting their ability to get financing on favourable terms in the future. If that happens, forget data deprivation, you’ll have other more serious problems to worry about.

Read Also: Interest-Free Instalments On Your Credit Card: 7 Important Things You Need To Know

Spreading The Cost Doesn’t Make The Cost Cheaper

Getting a brand new iPhone X for $0 upfront and spreading the instalment payments over 2 years doesn’t make the phone any cheaper. It still costs more than $1,600.

It does, however, give easy access to people whose financial situation would probably be better off without being burdened with paying for a phone that doesn’t cost more than half their take home pay.

Read Also: Does It Make Sense To Buy Your Next iPhone On Circles.Life Instalment Plan?

Responsibility To Educate About What “Interest-Free” Entails

Some might argue that its not Circles.Life’s job to educate their customers about the ramifications of taking 2-year credit card instalment plan.

We want to believe that Circles.Life genuinely cares about their customers, many of whom are young millenials. And if  they do care, then they should make efforts to highlight the financial planning considerations of taking up such a payment arrangement.

Sure, it’ll be tough to squeeze in all that disclaimers in advertisements. But if you can’t do it without getting more than a few of your precious customers in a sticky financial situation, then the responsible thing to do is to stop using 0% interest instalment plans in their advertising to hook unsuspecting consumers.

Read Also: How Quickly Credit Card Debt Can Snowball And Leave You In Financial Ruin

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