Wouldn’t it be nice if instead of a 3-week grace period (which is what you typically get from using a credit card), you got an entire 2 months to pay off your purchases? That’s 4 instalments (one instalment every 2 weeks) to pay off a balance while accruing zero interest and zero fees. That’s exactly what hoolah offers shoppers. What is hoolah (pronounced “hula”)?

What is hoolah?

hoolah is a method of payment in which your purchases (from participating merchants) can be automatically divided into four equal instalments. There are no fees or interest charges. This is worth repeating. Zero fees; zero interest. And as a shopper, it is free to use hoolah.

When a merchant offers hoolah as a payment option, all you have to do is choose to pay via hoolah. There is no need to sign up in advance for this service.

Here’s what happens when you make a purchase:

1. You buy an item from a participating merchant. Let’s say you want to purchase a new sofa for $800.

2. You choose hoolah as your payment option. Then, you will be guided through a registration process at the time of checkout (which takes just minutes).

3. You will automatically get an email which tells you the schedule and amount of your instalments. For our example, the $800 purchase means you will pay $200 per instalment ($200 x 4 instalments = $800) over the course of two months.

4. New customers pay the first instalment immediately. But once you establish a favourable risk and credit history with hoolah, you will get to defer the first instalment for 14 days.

Here’s how this process might appear:


How Exactly Do You Pay & What Happens When You Don’t?

During the checkout process, you will need to add either a credit card or debit card to the payment portal.

Currently, there are a few bank credit cards which allow for 0% payment plans. However, the big difference with these plans as compared to hoolah is that the plans charge you a fee. It’s typically a percentage of the purchase (3% to 5%). When you use hoolah, you are not charged a fee.

The only fee you might incur is if the instalment payment does not go through. The instalment payments are automatic, but sometimes, they don’t go through โ€” either because of an expired card or unavailable funds in the account.

The hoolah team makes it a point to try to resolve such issues prior to charging you a late payment penalty. In many cases, these issues can be resolved without a late payment penalty, assuming of course you havenโ€™t exceeded your credit/debit limit.


Limits, Rejections & Returns

How much can you spend using hoolah? The system calculates a range depending on the user (payment history) and the merchant (average transaction value for a particular merchant). Hence, luxury shops will have a higher limit.

You will know whether you qualify to use hoolah almost instantaneously, as their process for approvals is very efficient and streamlined.

What happens if you decide to return an item, or you receive a defective item? Just as with other online orders, these issues are worked out directly with the merchant (not with hoolah).


Purchases in Which hoolah Comes in Handy

A couple of years back a friend of mine needed $1000 for a school-related purchase for her daughter. Although she was gainfully employed and had a decent salary (more than $6000 a month), she didn’t have enough cash flow to cover this purchase. She didn’t want to pay the high interest rates for loans so she asked to borrow money. She said she’d pay me back in five instalments and I made her sign a contract. It was really awkward and I think it forever changed our relationship.

In this case, hoolah might have been less embarrassing and less awkward for both of us.

There are also instances where freelancers and contract workers (such as myself) get paid sporadically. Having a longer grace-period can really benefit such individuals.


Being Careful with Your Purchases

As hoolah is a new startup (launched February 2018), in the next few months, expect to see more and more merchants offering hoolah as a payment option, especially now that they’ve teamed up with many Shopify merchants (like Base Athletica).

With zero interest, zero fees, a free extra long grace-period, and a set-and-forget instalment schedule, there’s no real obvious downside to using hoolah. But you have to be really careful…

Having flexible payment options can be a lifesaver (especially for medical expenses and emergencies), but the safer and more responsible thing to do is to save for everyday and aspirational purchases. Keep in mind that merchants like and offer such payment options because it lowers the barrier for a sale. In other words, it makes spending a lot easier.

Paying in instalments is essentially locking in your future paycheques. And if you get used to this way of buying things, you will commit a larger and larger portion of your future cheques.

Instead, the more ideal situation is to be frugal, avoid lifestyle inflation, and save a little of each paycheck so that you have a surplus to handle everyday expenses or unplanned purchases.

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