Need a good gadget for traveling while trying to save every cents possible?
You want to buy an luxury item, say iPhone with RM 3600.
How to maximize the deal with flexi payment offered by the Bank?
Flexi payment is an interest-free (0% interest rate) installment plan when you pay for products or services via your Credit Card (selected banks at selected merchants) without any extra service charge. The duration can be up to 36 months or 3 years.
Normally, we will buy the iPhone by paying RM 3600 one-off.
However, we can make best use of the flexi payment to increase our monthly cash flow and actually pay less for the item.
By paying RM 3600, your cash flow will be greatly reduced by RM 3600 immediately. If your monthly salary is RM 5000, left RM 1400 can be used for food, accommodation, transport and others. Cash Flow Is More Important Than Your Mother!
Cash Flow Is More Important Than Your Mother
Alternatively, you can apply for flexi payment, which is easily approved in minutes with credit card, depending on your banks and participating outlet.
Instead of paying RM 3600, you pay RM 100 for the first month, leaving RM 3500 in your bank. You can put this RM 3500 into a flexible & high interest saving account with 2.25% p.a..
At the end of the first month you earn interest RM 6.5625, as calculation below:
Annual: 3500 x 2.25%
Monthly: 3500 x 2.25% / 12 months
3500 x 2.25/100 / 12 = RM 6.56 (2 d.c.)
Deposit the interest back to your saving account, making it RM 3506.56.
At the second month, you will need to pay the 2nd fixed repayment at RM 100.
3506.56 – 100 = 3406.56
With the remaining of RM 3406.56, at the end of the second month, it earn you second interest:
3406.56 x 2.25/100 / 12 = RM 6.39 (2 d.c.)
The interest is lower due to lower capital, still extra money than doing nothing. Deposit back the interest to your main account (3406.56 + 6.39), making it RM 3312.95.
The cumulative interest for these 2 months is 6.56 + 6.39 = RM 12.95
Free money. You can buy 10 packet of Nasi Lemak near Tesco @ RM 1.25 each.
Repeat until the fully repayment at 36th month, refer to the picture attached.
Maximizeyour cash flow and capital with Flexi Payments when buying luxury stuffs
For the past 36 months, your commitment is as low as just RM 100. If your net salary is still at RM 5000, you have the remaining RM 4900. At this moment, you not only had been enjoying the iPhone for 36 months, also extra RM 123.49, like 3.43% discount for your iPhone.
PS: This method can be applied to Real Estate Investment by maximizing the home loan and repayment tenure, however with extra complexity, i.e. looking for better ROI vehicle than loan interest. Not the topic we should be discussing here, there are more opportunities/benefits to be explored as well.
Thanks for reading this article. If you enjoyed this article, give us a like or a comment. If you wished to re-share, please contact us or at least stated the origin. Thanks again.
No comments