What are Monthly Interest-Free Payments (MSI)?
Monthly Interest-Free Payments, or MSI, are a powerful tool for consumers to purchase products and services in installments without increasing the price. These plans allow customers to pay for items over three, six, twelve, eighteen, twenty-four, or even forty-eight months at the same cost as paying in full.
Expert Advice on Managing MSI Debts
Paulina Casso, a financial education specialist, emphasizes that there isn’t a magical percentage indicating how much of monthly income should be allocated to MSI debts.
The National Commission for the Protection and Defense of Financial Services Users (Condusef) advises that the total debt should not exceed 30% of a person’s monthly income.
Casso adds that the exact amount depends on how well a user manages their finances. If someone allocates 20% of their income to an auto loan, only 10% remains for other debts like credit cards, family loans, or those trendy shoes from the neighbor.
“While there’s no precise percentage, I’d recommend that MSI debts should not surpass 10% of monthly income,” Casso suggests.
This leaves room for unexpected expenses or future debts, she notes.
Risks of Mismanaging MSI
Digitt, a financial company, warns that not controlling MSI spending can lead to risks, such as a negative impact on credit history. This occurs when available financing decreases, and Buró de Crédito flags a high level of indebtedness.
According to Fiserv México, two-thirds of people use MSI as a payment method. The most popular terms are three months (14%), six and twelve months (32% each), with 54% of consumers planning to use their credit cards for MSI during the Buen Fin 2025 shopping season, according to a Grupo UPAX survey.
Making the Most of MSI
The golden rule is to use MSI when the product’s lifespan or benefits extend beyond the debt term. Examples include computers, refrigerators, or stoves.
However, avoid MSI for short-lived items or benefits, like groceries. “Don’t use MSI for things that wear out faster than the payment term,” advises Paola Almontes, a financial education specialist.
Moreover, avoid MSI if you already have other debts under this method. “Don’t get carried away with multiple MSI for impulse buys you don’t even need,” she warns.
Key Questions and Answers
- What is the ideal percentage of monthly income to allocate to MSI debts? There isn’t a magical number, but financial experts like Paulina Casso and Condusef recommend keeping MSI debts under 10% of monthly income.
- What are the risks of mismanaging MSI? Mismanagement can negatively impact credit history, as available financing decreases, and Buró de Crédito flags high indebtedness levels.
- When should I avoid using MSI? Avoid MSI for short-lived items or benefits, and don’t use it excessively if you already have other MSI debts.
