Pros and Cons of Paying Over Time

Personal Finances

How often do you choose to pay for something over time? You have selected to pay overtime when you’ve used a loan or credit card to pay for something. While choosing to pay overtime can be convenient, it can also be costly if you don’t consider interest, fees, and other charges.

Minimize the amount of interest you pay by paying off the debt as soon as possible. There are situations in which paying over time is the right choice and situations when it is not.


With careful planning, paying overtime can be a useful financial tool. Before using a credit card to buy a big-ticket item or to take a trip, have a plan to pay it off quickly.


There are many ways in which paying over time can be costly.

0% financing offers may seem like good deals but always read the entire contract, especially the fine print. With many of these deals, if a payment is late or missed the terms of the loan change. This change can result in a higher payment and interest rate.

Some charge cards that require you to pay off the balance each month also offer a pay overtime option. Typically, you can choose which charges to pay over time. In some instances, certain charges are automatically determined. If you use this option, you should pay more than the minimum specified by the card issuer.

Credit card features that allow you to designate charges to pay over a longer period or allocate your payment to specific charges are marketed as helpful to you. However, this could cost you more. By spreading out your payments, you end up paying more in interest.

Some businesses have partnered with online financing companies. Choose the online financing company at checkout, and your purchase is paid for with a loan from that company. Even though you may have a choice of the number of months to repay the loan, you may not be able to pay it off early without penalty. Another drawback is not being approved for the full amount after the sale is completed and having to pay the finance company the balance immediately.

Compare all payment options before choosing to pay over time

Before you whip out a credit card to pay for a big-ticket item or sign a contract promising “no interest or payments until 2025” always compare all your options. Determine which option works best for you. And remember, never pay overtime for everyday expenses such as groceries, gasoline, office and school supplies, or utilities.



Information provided by FoolProof.