Regular payments are a good way to ensure that certain payments are not forgotten. However they have to be watched carefully and should be calculated before they are taken out.
The way a regular payment on a credit card is calculated is that an agreement is taken out at the beginning of a contract so the credit card can be charged at regular intervals. In this way the credit card can be charged at each interval. This has two advantages. For a large good or expensive service it can mean that the payments can be spread out over a period of time. It can also mean that for an ongoing service then the payments will not be missed.
In most cases the regular payments are agreed at the beginning of the contract. There have been complaints that some credit card offers do not make it clear that the payments are being made. If the clause is not present in the original agreement then the regular payments are unauthorised payments and the credit card user can have the payments reclaimed through the zero liability guarantee, as long as the credit card provider is notified in good time and that the person did genuinely not know that his or her card would be used in this way.
If the clause is present in the agreement, but it is not made clear in the advertisement for the good or service then the credit card providers can take a very dim view of this. This has been a particular problem with a number of internet offers that offer a free or very cheap good or service if the credit card details are given out up front and then start charging far larger amounts on a regular basis.
However there are many regular credit card payments that are used quite legitimately to either spread out the cost of an expensive good or to keep paying for an item that is continually being used (an example of this is insurance).
It is important that a person should calculate what the total cost of a good being bought with regular credit card payments is. The way to do this is to multiply the payments that are being made by the amount of times that the payment is going to be made. For example if there is a payment of $20 being made every month for a year, then the total payment is $240, which is mad up of twelve times twenty. It will often be the case that there will be a payment option for a one off payment, and that this will be less. It can be a good idea to compare this to the interest that would be paid on the credit card.
