How to make the most of split payments

Are split payment the new big trend in Europe? According to a study by Kantar, between 30 and 40% of French, German, Italian and Spanish consumers have already used this method, which is becoming an essential part of consumer habits.

The trick with splitting payments is knowing when it’s a financially sound decision. What are the things you should look out for when you decide to pay for a product in instalments, and how do you know when to do it? Fortunately, we're here to give you some tips on making the most of split payments.

Cope with unforeseen expenses

Bad news. Your computer has just given up on you without warning after many years of good and loyal service, and you need to buy a new one. Unfortunately, this month may not be the best time to make such a purchase, as you’ve got both your partner’s and mother’s birthdays coming up. In this case, split payments can be handy, as you can pay for your purchase in three monthly instalments, with the first instalment not due until next month. It's an excellent way to get the needed computer without cutting costs.

Take note of what makes this purchase an ideal one for split payments: it’s something you need to buy right now, which you have the budget for, but would spell trouble for your bank account if you bought it at once. 

Enjoy the bargains

Are you planning to go on holiday in a few months and have just come across a great offer for a plane ticket? The sales are in full swing, and the projector of your dreams is 55% off? These are all great deals that can be frustrating to miss out on because you don't have enough money at the time to pay for them. Making split payment purchases can be a solution to avoid missing out on good deals that you have been dreaming of for some time.

In this case, taking advantage of the split payment option is a way to save money. What you would end up paying in interest is dwarfed by your savings, which saves you money in the long run. Always compare the costs of buying now vs. buying later in these cases to see which option is cheaper. 

No need to dip into savings

Another benefit of split payments is that you don't have to dip into your savings. Whether it's an unexpected expense at the end of the month, an unbudgeted treat, or a big purchase you've been planning for a long time, paying in instalments can help you manage your budget and even plan your savings.

By smoothing out your expenses over several months, you'll be able to organise yourself better and put money aside, which you can, for example, invest in stocks or cryptos using Vivid's Savings Plan.

In this case, splitting payments means you can ride out volatility. By securing your invested savings, you’re not forced to sell them at a loss if you suddenly need money. Still, keep an eye on the cost of the split payment and compare it to the opportunity cost of selling your investments prematurely. 

With Vivid Now, our current account with an overdraft facility, you can focus on finding the best way to manage your monthly spending without impacting your financial freedom. Enjoy the financial freedom we know you deserve!

Are you having a spend-heavy month? Activate Free Up in your Vivid Now account. You can fund past transactions and pay them back in three easy payments. Big transactions never looked so manageable. 

Do you want to take things even further? Activate Auto Split! You'll be able to automatically fund any transaction over €20 and split it into three repayments. Link your Vivid Now account to a card, and anytime you use it, you'll be paying with your Vivid Now balance. And if you change your mind and want to repay it all at once, you can always do it!

How can you activate those features? A piece of cake. You only need a few minutes to apply. After that, we'll do a credit check. If approved, you'll receive your Vivid Now overdraft limit of up to €5000. You can find all the info by clicking here. 

We know that budgeting and life sometimes don't get along. Try Vivid Now to finally live in the now!