Description
This article explains how interest-free deals work. Although offered for many years now, they can be confused with the newer “buy now, pay later” services where no interest is charged, only late fees. This article highlights the costs associated with “interest-free” deals.
Introduction
They have been around for decades but interest-free deals can still be confusing and costly when not managed correctly.
Excitable advertising can make these offers almost too good to refuse, particularly with longer terms applying to higher levels of finance. For example, to get five years’ interest-free on purchases from some retailers, the minimum spend is $1,000. This simple condition could turn a necessary purchase of say, a new fridge, into a multiple purchase prompted by the seemingly innocent question, “do you need to upgrade your TV?”.
Five years up your sleeve to pay off a larger purchase may sound too tempting to pass up but never forget the age-tested maxim “buyer beware”. In the case of interest-free it’s not always as simple as it sounds.
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