2023-12-05 11:44:13
In the middle of the Christmas business, the Chamber of Labor (AK) warns against buying gifts from mail order companies on installment payments. Because the devil is in the details: Under certain conditions or as part of promotions, there is the possibility of zero percent financing, but outside of that, partial payments can be expensive. The effective interest rates can be more than 20 percent, the chamber wrote on Tuesday.
According to the AK, the effective interest rate for Universal Versand, Otto Versand or Neckermann.at is 21.70 percent. If the interest rates are lower or even zero, there are often special offers with certain conditions: At Amazon, the zero percent interest only applies to selected products, otherwise the interest rate is 12.05 percent, according to the AK. Klarna Bank also offers zero percent interest, but only if you pay three installments within 60 days. Zero percent financing is also possible at Hornbach, with terms of 12, 18 or 24 months. However, for alternative desired terms between 12 and 60 months, an interest rate of 6.9 percent applies.
“Instalment loans are among the most expensive forms of credit,” says AK consumer advocate Christian Prantner. It is important to always pay attention to the “small print”, because cheap financing without interest is usually linked to special conditions. “It also sounds tempting when mail order companies advertise 1.65 percent per month. That doesn’t seem like much, but on an annual basis it’s very expensive.”
The AK therefore advises looking closely at the effective interest rate and the total of all installment payments and paying attention to expensive insurance packages. “The effective interest rate shows the actual cost burden,” says Prantner.
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