January 15,2007

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  Same as Cash?

  You may have been shopping at the furniture or electronics store, and seen the great big posters advertising "same as cash" financing. The idea of monthly payments sans interest sounds too sweet to pass up, and that leather sofa / big screen TV is something you just have to have, right? And you are so responsible, of course, that you will SURELY make the payments fully and on time. You may be wondering where to sign, but it's a credit screw-up waiting to happen!
  
  The snake in the grass on same as cash deals is the specter of interest. If you miss a payment, or fail to pay off every last cent of that charge by the financing due date, you will likely be stuck with backlog interest from when you first bought your new toy, in addition to the remaining balance. This is bad enough, but a true disaster when you consider that interest rates on such deals can soar up to 30%! The short story is this: too many things can go wrong with "same as cash" deals. A credit card charge will never be exactly the same as ready money, no matter what the advertisements say! Better to finance such a purchase on your own, low-interest general use card, especially if you stand to gain lots of rewards points on a major purchase!
  
  
  
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