Posted on April - 22 - 2010
The Dirty Little Secret of No-Interest Financing
When I was in college, I bought my first laptop using a financing option. The terms of the agreement stipulated that if I paid off the balance in six months and make at least the minimum monthly payments, I wouldn’t be charged any interest. Perfect, I thought. I’ll put a little aside each month and in six months, the laptop is mine. Like any good American, I became complacent and kind of ignored the bill.
About three months in, I forgot about it all together, and didn’t look into the charge until the end of the six month period. Because I didn’t read the fine print, I didn’t realize that missing a payment, or even being late on a payment meant the no-interest financing deal was off, and I was immediately charged the full six months of interest.
That’s the dirty little secret about no-interest financing. It’s incredibly fickle. There is no margin for error. Not only that, but the interest rate jumps from a wonderful zero percent, to a wallet-crushing 20% or more. After that expensive lesson, I still take advantage of no-interest financing, but now I set up automatic bill pay. If you are going to take advantage of a seemingly great financing offer, I suggest you do the same.
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