No payments for12 months, do you do it?

[Radiance]

So,I have trained myself to save and wait to buy in cash intead of charging.
But, how about the offers where you can pay in 12 months with no interests?

If you are disciplined is that ok?

[disneysteve]

Originally Posted by Radiance

So,I have trained myself to save and wait to buy in cash intead of charging.
But, how about the offers where you can pay in 12 months with no interests?

If you are disciplined is that ok?

I would say no. I did this in the past when I was young and stupid but I wouldn't do it again.

I don't believe 0% financing actually exists. I believe you pay more for the product. For example, many furniture stores advertise 0% deals, but if you ask, they'll usually give you a 10% discount if you pay cash upfront. When my daughter got her braces, the orthodontist offered 0% financing or a 5% discount for payment upfront. When you accept the 0% deal, you lose any bargaining power.

Also, having another open credit account isn't good for your credit score. Why mess with it? This is almost always for buying wants, not needs. Save up and pay cash.

[littleroc02us]

The reason they make those offers is because a large percentage of the public won't pay it off in 12 months and then the finance company will stick it to them with the interest that's accrued.

[disneysteve]

Originally Posted by littleroc02us

The reason they make those offers is because a large percentage of the public won't pay it off in 12 months and then the finance company will stick it to them with the interest that's accrued.

That's true, but doesn't really address OP's question. Some of us are responsible and disciplined enough to do the 0% thing without getting burned. I've done it several times. As I said above, though, I now realize that it really isn't such a good idea.

[littleroc02us]

To answer the question from the poster, No! Never, since I was young.

[bjl584]

I agree with Steve. You will probably get a better deal if you make it known that you are able to pay in cash up front.

However, if there is no advantage to paying cash up front, and if you can't get a better deal elsewhere, then I don't have a problem with taking advantage of such a deal so long as you are disciplined and make sure to pay it off at the end of the term.

[GREENBACK]

Originally Posted by bjl584

However, if there is no advantage to paying cash up front, and if you can't get a better deal elsewhere, then I don't have a problem with taking advantage of such a deal so long as you are disciplined and make sure to pay it off at the end of the term.

I was looking at ads in the news paper today about big screen tv's and they were taking a couple hundred bucks or so off of some sets and still offering 12 and 24 mth. 0% offerings. I could see doing something like that. As has been stated, They're looking for those who won't make the "deadline" on these deals.

[disneysteve]

Originally Posted by GREENBACK

I was looking at ads in the news paper today about big screen tv's and they were taking a couple hundred bucks or so off of some sets and still offering 12 and 24 mth. 0% offerings.

Some of the major electronic retailers have salespeople who work on commission. Others work on salary. At the places that work on commission, you may be able to negotiate a better price, particularly for a cash purchase. You can Google the store to find out if they are commissioned or not.

[GREENBACK]

Originally Posted by disneysteve

Some of the major electronic retailers have salespeople who work on commission. Others work on salary. At the places that work on commission, you may be able to negotiate a better price, particularly for a cash purchase. You can Google the store to find out if they are commissioned or not.

I was specifically refering to "HH-GREGG". I haven't done a search there or know if you've even heard of them. They're a fairly large retailer in my area and often make these kinds of deals. I have negotiated a few items with them in the past through the store manager so I guess they are salaried salesmen. When they knock $200 off of an $800 tv and give 0% for a year I'm satisfied to not have to haggle with them. 'tis the season to buy TV's though

[Naz56]

I actually did this a few times but don't recommend it. You can get stuck with a pretty big debt if you don't pay after 12 months.

[Coronet]

I think it depends on the product. I bought a new computer that had 0% interest for 12 months. I structured my payments to pay in full in 11 months to make sure that I wouldn't be charged any more than I would have paid had I paid up front. If I didn't think I could make the payments then I wouldn't have done it, but I knew I could (I already had the cash up front, but I didn't want to touch the cash in my savings account in case a true emergency came up).

Works for me, but I know I'm diligent.

[skruggie]

Originally Posted by Coronet

I think it depends on the product. I bought a new computer that had 0% interest for 12 months. I structured my payments to pay in full in 11 months to make sure that I wouldn't be charged any more than I would have paid had I paid up front. If I didn't think I could make the payments then I wouldn't have done it, but I knew I could (I already had the cash up front, but I didn't want to touch the cash in my savings account in case a true emergency came up).

Works for me, but I know I'm diligent.

I did this when I bought my macbook pro - Apple is not a retailer, obviously that negotiates. My plan was to pay $100 a month on the $3000-ish purchase price, and pay the balance before the expiration date of the offer. I have quite a bit more than 3000 in my savings, there was never any danger of this not working out.

I use 0% offers to my advantage, rather than tying up cash that can be used in other ways. It was not the first time I've done this, and it certainly won't be the last time.

I would never put my self in a position of financing so much money that I could not afford to withdraw the balance from my savings if I had to.

[LivingAlmostLarge]

Sure depends on the situation. I did it when our dog had chemo. We had to make a snap decision and I got the 0% card for his stuff. Sigh I think we put on $6k and paid it in a year. I paid it off monthly, but could have paid for it up front. It was easier.

[YourLifeSolution]

Do it if:

You are going to just pay it off a week or month later
You are getting credit
The price is comparable to paying cash

[CCCFree]

I agree as well that you should just save up and pay cash. I had an offer like this for my laptop, and a few months later I got laid off and had some serious problems with paying that debt.

I wish I would've taken the advice of this forum before I'd bough my mac.

[Frugal]

No, it is not a good idea. Even for the most disciplined people, the psychology of credit tends to get them in trouble. CCs are always T-ROUBLE! I don't use them at all, although I do have them to build my credit score, and use in an emergency. They are also useful if you ever go overseas.

I have heard of people making excessive purchases, just because that "Free" offer of credit enticed them to buy a $20,000 sofa that ended up taking them several years to pay off...watch for rates to jump after the introductory twelve months run out, as they most certainly will!

[snshijuptr]

If the price ends up equivalent and you already have the money set aside, I see no problem with buying something on credit and paying for it before interest accrues. I would definitely leave yourself a buffer. I don't see this as being any different than using a credit card and paying it off at the end of the month. If you can handle that, then you can probably handle 0% 12 month financing.

Personally, I would place a reminder in my calendar or schedule a lump sum payment with my bank for the 11 month mark.

[debtfreeme]

Nope. Save the money each month and pay cash. To many people say they will save the money after signing on the dotted line and then they don't and accrue interest from the beginning of the agreement. Nope.

[crazyskunk82]

0% for 12 months is a bad idea. Studies show that most people don't pay it off in time and then they tack on the full 25% interest rate for the full amount for all 12 months beforehand. When I did that, all the progress I had made in trying to pay it off on time was erased by interest. I owed the same amount a year later despite nearly paying it off!

[GREENBACK]

Originally Posted by crazyskunk82

0% for 12 months is a bad idea. Studies show that most people don't pay it off in time

I won't argue with whatever study you've read but that doesn't apply to everyone. I'd do a 12 mo. loan like this if I was getting the same deal as paying in cash. I'd also be sure to actually have the cash to pay this off at anytime should something change.

They are playing a game for suckers(apparently there are many out there!). The moral of the story is.....don't become a sucker!