Check the fine print with "Interest Free" offerings from retailers.

[morgue]

I was doing some reading of the Junk mail on the loo, as one does, depending on the paper type, it does come in handy.(but that is for the Tight Arse thread...no pun intended)
...Anyway, the local electrical retailer was offering a 5 year Interest Free period on stuff over $500.00.
Anyway, I got looking at the fine print, I wear glasses, well, when you qualify for the interest free debt, you will be signed up to the GE Go Card, Visa or Mastercard type...depending on your preference, which will have an automatic $9000.00 limit. So they sign you up for a debt of a fridge say $1500.00, then give you a credit card with a $9000.00 limit.
Nice one fella's.
You can not make a last repayment...ie hold off until the last 2 months of the interest free period, then plunk down the cash to pay off the item, oh no, you have to make minimum repayments as per the monthly notice, which has attached to it...wait for it...Charges. Yep, they slug you $6.00 per month account keeping charges.
60 months @6.00 = $360.00, nice little earner...the banks have taught well.
But here is the kicker...the designated calculated repayments over the life of the loan..ie 5 years...are not calculated to pay off the whole debt...which means, you are lead to believe that your minimum monthly repayments are paying back the debt....they are not.
So come the last repayment of the loan and you have been paying back the minimum...nah, you will still have a balance left over...which means you have not paid off the loan over the 5 years...so you must pay 25% on the loan outstanding...which is not the last repayment amount...ie $25.00...oh no,it is the $1500.00, plus any other charges needed for dispursement of the loan.
So, if you are taking out one of these loans, don't pay it out over 5 years, pay back as quick as possible.
Its amazing what is in the junk mail fine print these days.
 I'm even more amazed I was given the time to read it, for the kid was not yelling out for me to help her with some school work...oh, the smallest room in the house,
it does have its' value besides the physical activity one does in it.

[D4D]

Caveat emptor.

I've had a GE card off and on for over 10 years and never paid interest. Costs me $4/m admin fee when I have it. I use it for big purchases, furniture, white goods etc. and always buy when they're having sales. I would have bought most of the more expensive items in the house with it. They say they won't discount for GE but I find the youngest/keenest sales guy and he will usually discount. Factoring in the admin fee I always come out ahead and I am effectively using somebody elses money for free.

The trick is to subtract the payment months by 1 then divide the total amount owing by that number. That way you never pay interest. i.e. 24 months interest free for $2000, 24-1 = 23, $2000/23 = $86.96. If you pay $90/m you're covered.

That said, I agree their bills are sneaky and if you are not careful you can end up in the crap easily.

[Fivid]

We bought a freezer years ago on a deal which was something like 24 months no repayments.  Noticed in the fine print that although we didn't have to make any payments for the 24 months, interest was accruing on the amount borrowed and if the amount borrowed was not paid in full before the 24 month no repayment term finished then the interest was added to the amount borrowed and you all of a sudden had a bill for twice as much than you borrowed by the time you started to pay it off.  We made sure we paid it off with the first few months!

[Vince]

Same as D4D....and calculated the same way. We have made many purchases using the interest free and not paid anything extra except the account keeping fee of $3.95 when in use. It does work out a cheaper shopping alternative using this method.

Most people make that mistake of paying the minimum payment and get caught bigtime at the end of the interest free period. It is simple calculation even at the time of buying to see how much per month you will pay to cover the cost(s)

[fitzyfootlong]

Without GE interest free I would have no Furnature!! I reckon I have spent close to $20k over the last 10 years and they have never got a dollar of interest from my wallet  I reckon it's easier than saving up.. Do yourself a favour and chop the card up so you don't resist temptation and always make sure you pay it off as fast as you can, and more than the minimum monthly payment!

[cancan]

I havent used these cards  for years but I would save for the item first and if the cash deal wasnt good enough i would use the card and put the cash in an offset account and collect the interest and then pay off the card before they started charging...and charging they do if you dont pay it

[waz65]

Caveat emptor.

I've had a GE card off and on for over 10 years and never paid interest. Costs me $4/m admin fee when I have it. I use it for big purchases, furniture, white goods etc. and always buy when they're having sales. I would have bought most of the more expensive items in the house with it. They say they won't discount for GE but I find the youngest/keenest sales guy and he will usually discount. Factoring in the admin fee I always come out ahead and I am effectively using somebody elses money for free.

The trick is to subtract the payment months by 1 then divide the total amount owing by that number. That way you never pay interest. i.e. 24 months interest free for $2000, 24-1 = 23, $2000/23 = $86.96. If you pay $90/m you're covered.

That said, I agree their bills are sneaky and if you are not careful you can end up in the crap easily.

X2 , but i subtract 2 months ie: 22 months instead of 24 months , 10 months instead of 12 months etc,etc

[Pauly]

I have this option with my business. In 10 years i have 1 client who used it, im a bit too honest I think.

No matter what some think you always pay the interest you just dont know it. As a retailer I get charged x amount per loan i sign up. I think from memory it was 1 % per month interest free term. So for a 12 month interest free period I would pay 12% of the sale price to the finance co plus whatever fees and charges applied. Now theres no way im going to pay 12% out of my pocket, thats why its always cheaper for cash.

[D4D]

Pauly you may not want to pay the interest but there are plenty of hardly normal employees who do. You just need to find the young one at the end of the month.

[Pauly]

The interst and fees must be built in somewhere, nobody works for nothing. Its no differant than those shopping vouchers for cheaper petrol, its built into the price.

[D4D]

True the seller is paying the interest and I paid the monthly fees. Here's an example, we bought 2 x 3 seater leather couches RRP $2500 each. We were able to get 10% off with free delivery ($70) so $4500 on 24 month interest free. Adding in the $4/m ($96) admin fee the total we paid was $4596 or approx $200/m paid over 23 months. We setup a direct debit from our mortgage offset account and didn't think about it again. Having the bulk of the $4596 sitting in our mortgage saved us even more in interest. It is too early to work out the compound interest saving.

My point is, we probably would have got a better price for cash but when you look at the total picture, we're better off this way.

[speewa158]

So Iet me get this straight  " There an`t no free Iunch  " Arrrrrr you reckon 

[D4D]

On an average mortgage of $400,000 over 25 years, having an extra $5000 on your mortgage reduces your interest paid by $12000 and takes 6 months off. Hence you do get something for nothing