Re: Are 0% Apr Credit Cards a Magic Debt Solution?
Rexdart,
Credit Cards do not work that way. After the 0% introductory rate has ended the interest rate goes up to whatever amount is stated and you begin to pay interest on the outstanding balance from then on.
Store financing for furniture, electronics, appliances does in fact work similar to your example. If you do not pay off the ENTIRE balance by the end of the contract you are smacked with the entire interest penalty! This is why they offer it, since too many people miss the deadline for whatever reason. Even in you are $1 short of completely paying it off, you are charged the interest on the full amount of your original charge for the finance period. You are also charged interest on a monthly basis from that point on.
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