Splitit, while offering a flexible installment payment solution, comes with several drawbacks that users should be aware of, primarily concerning payment limitations, retailer availability, and credit card holds.
Key Disadvantages of Using Splitit
Understanding the limitations of Splitit can help consumers decide if it's the right payment method for their needs. Here are the primary cons:
- Limited Payment Options: Splitit has stringent requirements for the credit cards it accepts. It only accepts Visa and Mastercard. Furthermore, some retailers that are compatible with Splitit may not accept debit cards, even if the user's bank supports them. This narrow acceptance can be a significant hurdle for users who prefer other card networks or rely on debit cards for purchases.
- Limited Retailer Partnerships: The service partners with a restricted number of retailers. This means that Splitit cannot be used universally across all online or in-store purchases, limiting its utility compared to more widely accepted payment methods or buy now, pay later (BNPL) services.
- Full Balance Hold on Credit Card: A major drawback of Splitit is its policy of placing a hold for the full purchase balance on your credit card. While you are only charged for each installment, the entire amount of your purchase is reserved on your credit card's available credit. This can significantly reduce your available credit limit, potentially impacting your ability to make other purchases or affecting your credit utilization ratio until the full balance is paid off.
- Retailer-Imposed Purchase Limits: Retailers integrating Splitit may impose their own maximum or minimum purchase values for customers using the service. This means you might not be able to use Splitit for very small or very large purchases, depending on the individual store's policies.
Here’s a quick summary of the cons:
| Con of Splitit | Description |
|---|---|
| Payment Restrictions | Only accepts Visa and Mastercard; some retailers may not accept debit cards. |
| Limited Acceptance | Partners with a restricted number of retailers, limiting where it can be used. |
| Credit Card Hold | Places a hold for the full purchase balance on your credit card, reducing available credit. |
| Retailer Purchase Caps | Retailers can set maximum or minimum purchase value limits, preventing use for certain transaction amounts. |
By being aware of these cons, consumers can make informed decisions about whether Splitit aligns with their spending habits and credit management strategies.
