AZE.US
Advertisements offering “0% credit” or “interest-free installment plans” have become a familiar part of Azerbaijan’s retail market, especially in electronics stores during holiday campaigns. Drawn by the promise of paying no extra interest, many shoppers wait specifically for such promotions before making expensive purchases.
But behind the marketing, the reality is often less straightforward.
At first glance, the offer appears beneficial. A customer gets the product immediately and pays over time, while the seller gains a buyer. Yet economists say these campaigns are frequently structured in a way that still generates profit through other charges, even if no formal interest rate is applied.
Economist Mushfig Nuriyev told Bizim.Media that “0% credit” is often just another form of hidden lending. In his view, the absence of an announced interest rate does not mean the buyer escapes additional payments.
The key question, he said, is simple: if the credit is truly free, how do the store and the bank make money?
According to Nuriyev, the answer usually lies in commissions, service fees, insurance costs and, in some cases, late-payment penalties. A phone that costs 800 manats in cash, for example, may end up costing 1,000 manats under a so-called interest-free plan once extra charges are added.
That is why the term “0%” can be misleading. The financial burden is not always removed; it is often repackaged.
Many buyers in Azerbaijan are not entirely unaware of this. Some understand the mechanics but still choose such deals because spreading payments over time feels more manageable than paying the full amount upfront. The marketing also plays on psychology: “interest-free” sounds safer and more attractive than a standard consumer loan.
Nuriyev said such offers can genuinely benefit consumers only in limited cases — mainly when the campaign is run directly by the retailer and the installment price is exactly the same as the cash price, with no extra commission or service fees added on top.
If there is no difference between the cash price and the installment price, he said, the promotion can be treated as a real benefit for the customer. In most other cases, however, it is better understood as a marketing tactic designed to attract demand rather than a truly cost-free financial option.
For consumers, the real issue is not whether a deal is advertised as “0%,” but whether the final amount paid remains unchanged. That is where the difference between a genuine discount and a hidden trap begins.