How Credit Card Easy Payment Plans Work

Why Your "0% Interest" Easy Payment Plan Still Costs You Money

Christina Chandra

10th September 2025 - 4 min read

Malaysians love a good deal, especially when credit cards flash those tempting “0% interest” Easy Payment Plan offers. EPPs can be a smart way to manage big purchases if you know when and how to use them and what to watch out for!

The RinggitPlus Malaysian Financial Literacy Survey 2024 (RMFLS) highlights that 57% of Malaysians still do not own a credit card, while just over half of cardholders pay their balances in full each month. This shows that although credit card penetration remains limited, responsible repayment habits are growing among existing users. With more Malaysians turning to digital finance, instalment products like Easy Payment Plans (EPPs) are an increasingly popular tool for managing large purchases.

Before you split that next purchase into instalments, here is what you need to know.

Hidden Costs Behind “0% Interest” Marketing

Banks love to advertise “0% interest”, but hidden charges often apply.

Processing fees: These range between 2% and 8% depending on the plan tenure. Shorter instalments usually carry lower charges, while longer instalments attract higher fees.
Merchant surcharges: Some retailers add 2% to 5% when you choose EPP. Big chains like Harvey Norman or Courts often waive these, but smaller outlets do not.
Minimum spend requirements: HSBC sets RM300, while Maybank and UOB usually require RM500 to RM1,000.

Together, these conditions mean a “0% interest” plan is not always cost-free. While fees add to the total cost, EPPs often remain more affordable than Buy Now Pay Later options and carry less risk if payments are managed responsibly.

EPP Features As Compared To Other Payment Options

Predictable repayments: EPPs break large purchases into fixed monthly instalments over 3 to 60 months, making it easier to budget.
Wider acceptance: Most major retailers partner with banks to offer EPPs, and they are directly tied to your credit card for convenience.
Credit building: Timely payments are reported to credit agencies, which can help strengthen your credit score over time.
Regulated protection: EPPs are governed under Bank Negara Malaysia’s credit card rules, giving stronger consumer protection compared to unregulated instalment schemes.

Cash payments are the cheapest option if you can afford them upfront, but EPPs provide valuable flexibility and structure. They help you manage higher-value purchases without draining savings, as long as every instalment is paid on time.

Smart EPP Use vs. Risks

EPPs make sense for essential purchases like appliances or work tools, or when retailers absorb fees during promotions. They can also help build credit history if repayments are made on time. EPP is also useful when the price of something you want to buy is too big for BNPL and too small for a personal loan.

Missed instalments trigger late fees of RM10 to RM100 and card interest of up to 18% a year.
Taking on multiple EPPs can strain monthly budgets and lead to cash flow problems.
Prepaid services such as gym memberships carry added risk because you must keep paying even if the provider closes.
High utilisation of your credit card limit can negatively affect your credit score.

Unlike BNPL, which may not always report payment behaviour to credit agencies, EPPs are tied directly to your credit card. This means missed payments are more visible to banks and can affect your credit standing, but on-time payments can also strengthen your credit history.

Shariah-Compliant Options

Malaysia’s dual banking system offers Islamic EPP variants under Bai’ Inah structures. Maybank Islamic’s EzyPay-i, CIMB Islamic’s FlexiPay-i, and similar products provide Shariah-compliant instalment options for Muslim consumers.

Islamic EPPs typically mirror conventional versions in terms of fees and tenure options, but structure transactions to comply with Islamic finance principles. Processing fees are structured as profit margins or service fees (ujrah), depending on the bank’s Shariah framework, rather than being treated as interest.

Regulatory Changes: New Consumer Protection Rules

Parliament passed the Consumer Credit Bill 2025 in July, creating a new Consumer Credit Commission to regulate non-bank credit providers. Buy Now Pay Later schemes will face stricter oversight, while EPPs remain under existing credit card rules. Consumers can expect clearer fee disclosures and better protection going forward.

Making Smart EPP Decisions

EPPs are not free, but they are not bad either. Used correctly, they can help you spread out essential expenses without draining your savings. The key is to understand the fees, keep track of your commitments, and treat EPPs as a short-term tool that only works with consistent on-time payments.

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