Beware 0% Interest Finance Offers
Just a word of advice for those of you tickled by the thought of owning a television or refrigerator by paying only the minimums on a 0% interest finance deal… see, the one thing that most stores don’t mention is that after the promotional period has ended, the interest that would’ve accrued during the promotional period will be packed onto the loan immediately!
My advice is to read the fine print to find out what the hidden interest rate is while the 0% promotional offer is in effect, sometimes it can be ridiculous. Second, only buy these products if you can pay off the entire thing before the promotional period ends. If you can’t, try to secure some better financing terms before the promotional period ends so you aren’t stuck paying ridiculous rates for a few months.
Finally, remember that it’s a loan so it’ll appear on your credit report and ding your credit score. If you plan on any big purchases, house or car, then you might want to hold off on the new flat screen.
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4 Comments - Share Your Thoughts
This is true for most of these offers. The exception is Sears. I have used zero percent financing for them on a couple of purchases in the past and they did not accrue the interest.
I used one of those deals two years ago when I bought a new couch. I read the fine print and I knew what would happened, so I just calculated how much I needed to pay monthly to pay off the loan about two months before the promotional period ended. no problem. The only thing I didn’t know at the time was that the new line of credit would take down my credit score a bit.
Yep, we used a 0% offer to finance splurge on an item… 3 years 0% interest… I made sure our payments were made in such a manner that it was paid off in 3 years… but I, too, didn’t think about the impact of the additional credit on my credit score…
Its funny that I’ve come across this forum- I just got a bill from Circuit City (a Chase credit card) for a TV I purchased a year and a half ago at 0% interest for 3 years. Great right?! WRONG. I was 5 days late on my last payment, and guess what happened- I was charged $747.14 for the waved finance charges since I bought it. I calledand spoke to a few people at Chase, and nothing. They are absolutely ruthless, so my advice is to not use credit cards, or dont be late,
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