Buying on instalment, either managed in-house or under the aegis of credit cards, is a consumer trend that gains more impetus in recessionary times (When a $6k TV ends up costing more than $16k, Nov 6).

Retailers encourage it as the interest returns on the purchases bought on credit are far more than the profits on the competitively priced original item. The rates may go beyond an exploitative 30 per cent per annum, far in excess of what even moneylenders can officially charge.

Newer generations of financially savvy Singaporeans, even if they vaguely understand the crushing credit burden of compound interests, merrily live it up in the moment, paying small instalments but ratcheting up years of debt.

Older, unknowing Singaporeans think retailers are doing them a favour by splitting the bill into small fragments repaid over years, and sign on sanguinely without consideration of dire consequences if due payments are delayed.

They become unwitting victims of predatory lending.

There is no such thing as a free lunch. No business can afford to make "terms-free" loans without incurring capital or opportunity costs, and these are inevitably borne by the often poorly advised consumer.

Despite all claims to the contrary, all hire-purchase schemes come with loaded premiums upfront.

Pressed hard enough, cash on delivery almost always gets a discount over items bought on credit. And don't even think of early repayment of the in-house loan or cancelling your credit card before the time payment is fully repaid - the penalties are mean and ugly.

Yik Keng Yeong (Dr)