What unregulated credit means
Unregulated credit is a broad term used for credit or payment arrangements that don’t fall within the same regulatory framework as mainstream consumer credit products.
That doesn’t mean the agreement is illegal or automatically risky. It means you shouldn’t assume it comes with exactly the same protections, requirements or routes for resolving problems as another type of credit.
Before using any form of credit or installment plan, look at:
- how much you’ll repay in total;
- whether you’ll pay interest or fees;
- when payments will be taken;
- what happens if you miss a payment;
- whether the provider carries out a credit check;
- what happens if you want to cancel or repay early;
- who you contact if something goes wrong.
What unregulated credit means
Regulated vs. unregulated credit: the key difference
Regulated credit generally has specific requirements governing how the product is offered and managed. Depending on the product and where you live, these can cover things such as the information you’re shown before agreeing, how costs are presented, checks made by the provider and how complaints are handled. Because Splitit’s credit card installments run through the credit card you already have, they sit within that same regulated framework.
Unregulated credit doesn’t necessarily come with that same set of requirements. The terms of the individual agreement therefore become particularly important.
How Splitit uses your existing credit
With Splitit credit card installments, you use the credit already available on a credit card you have. Credit card installments work within your existing credit card limit, rather than creating a separate line of credit. You need enough available credit to cover the full purchase amount when you set up the plan, and your existing credit card terms continue to apply.
A checklist before using any credit or installment plan
Before making a purchase, give yourself a simple checklist:
- Total cost: How much will you have paid by the end?
- Monthly commitment: Can you comfortably make every payment?
- Interest and fees: Is there a finance charge, interest or another fee?
- Available credit: If you’re using a credit card, how much credit will you have left for other spending?
- Missed payments: What happens if a payment doesn’t go through?
- Early repayment: Can you pay the balance sooner, and does doing so change what you pay?
- Your rights: What cancellation, refund and complaint processes apply to the particular payment method?
If you can answer those questions, you’re in a much better position to decide whether the payment option works for you.