How Can I Maximize an Offer?

Many consumers take advantage of interest and payment free promotions to save finance charges on purchases. But the offers are not always as clear as they seem.

You have to read the fine print that accompanies the offers to avoid unexpected charges. Here are some important things to know:

Some retailers offer no payment promotions, but still assess finance charges during the deferral period. This is no bargain, because your bill just gets bigger each month.

Interest-free is not the same as payment-free. Even if a retailer advertises same as cash financing for three or more months, consumers may still have to make minimum payments during the promotional period to qualify for free financing.

Interest-free periods usually start on the date of purchase. Some consumers incorrectly assume it starts on the date of the first billing statement they receive after their purchase.

They confuse the number of months in the promotional period with the number of billing cycles they have to pay off the balance.

Say a retailer is offering 12-months of interest-free financing. The offer starts on the date of purchase, which could be several weeks before the consumer receives his first monthly billing statement. In that case, the promotional period will end before the consumer receives his 12th monthly bill.

If you fail to pay your bill within the promotional period, retailers usually compute retroactive finance on the entire purchase price, not just the portion of the bill you have yet to pay.

To make sure a purchase is interest-free, pay at least the monthly minimum listed on each billing statement and pay the balance in full before the promotional period expires.

Mark your calendar so you don’t forget when the promotion ends–don’t assume it corresponds to a billing statement–and mail the final payment in plenty of time to reach the merchant before the expiration date.

Read more about this issue here.

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