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Installment payments on U.S. credit card

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  • Installment payments on U.S. credit card

    When I used a credit card to pay for items at the local Yamada Denki and Sport Depot, the cashier asked me whether I would like to have the total amount charged at one time, or whether I would like to spread the charges over time (I think it was possible to do up to 12 months). I thought this was rather odd, as in the U.S., when you purchase items with a credit card, the total amount is charged at once and you decide how long you want to drag out the payments (subject to the interest rate on your card).

    I am aware that with Japanese credit cards, or at least in my experience, it is somewhat more restrictive in that you generally have to decide when you apply whether the entire balance will be deducted from your bank account all at once, or over a specified number of months. But I have never encountered the situation where the merchant will spread the charges on a credit card that is not related to them (e.g., not a "Yamada Denki" Visa) over a span of a few months.

    Of course, I wouldn't mind spreading payments out over time, but I was just wondering if the merchant (not the card company) charges interest in such situations. So my questions are:

    1) whether anyone has taken advantage of this when using their credit card
    2) if so, whether there was any interest charged by the merchant
    3) does the location, in my case U.S. or Japan, of the bank that issued the card make any difference in whether this option is offered

    Any clarification by anyone who has taken advantage of this apparent freebie would be appreciated. However, my gut feeling is that the merchant charges a fee for speading the payments out. Thanks!

  • #2
    The Japanese credit cards are set up so that the customer can specify the number of payments they wish to make. However with American cards, you charge it one time and then you decide how much to make as a payment depending on your ability to pay. There is a minimum payment of course so you can spread out the payments as long as you meet the minimum amount.

    When making application for a card in this country, usually one must put down one's bank and bank account number on the application form so that is the reason why customers can choose how many payments they wish to make based upon their monthly bank balance (as the charges are automatically deducted). And of course there are interest charges leveled accordingly just like any credit card.

    I have used my American visa countless number of times here in Japan and I just always say one time payment. It really makes no difference because the systems are set up differently.