KUWAIT: The option to pay in interest-free installments has recently become popular at online shopping stores, where the terms of installments are simple and easy for shoppers. The service aims to ease the process of online shopping by dividing the total price into three or four installments without added interest. Speaking to Kuwait Times, economist Mohamed Ramadan said the interest-free installment system is not a scam, but rather a means to boost sales. "The interest-free installment system is approved in several countries around the world and is not a new service.
It is well known that the merchant pays the cost of the goods in 120 days, so when he offers those goods without interest, the customer benefits. The main aim of such a service is to increase profits and facilitate sales, with no cost to the store,” he said. Salma Rababah affirmed to Kuwait Times she is shopping more because of the interest-free installments. "I was not a fan of installments, but online installments by some stores allowed me to buy things that were not affordable for me before. I spend now between KD 60-80 per month on installments,” she said.
"Usually, I used to allocate KD 50 monthly for new clothes, but the interest-free installment system has allowed me to buy high-value items and gifts from top brands that I could not previously buy because of their prices” she added. Rababah said she has begun to buy clothes, perfumes, bags and gifts which she usually could not buy due to her limited monthly budget. Interest-free installments have allowed Amer Al-Rashed to afford a fancy look among his peers.
"Some online shopping stores offer this service for men’s clothing, backpacks, sneakers, glasses and sports equipment. Sport and men’s clothing are more expensive than women’s items. Women’s shops always have sales, but this is not the case for men. This service provided us the ability to afford shoes that may cost up to KD 100. Now people can afford to be in higher societal groups,” he pointed out.
However, Rashed warned people that an installment plan that is not charging any interest on the amount they finance may have some hidden fees. "It’s important to read the terms and conditions carefully because they may have other charges and fees. For example, there are penalties and charges for delayed payment,” he pointed out.