Buy Now Pay in 2011with no Interest-Is there a Catch?

    
Now that we are in peak holiday season, the electronics retailers roll ou buy now pay later with zero interest. On the surface this sounds like a great deal and it can be if you are very careful with following the rules. Many people do not and end up paying a huge amount. The credit companies that back these programs are counting on a certain number of people to be late on the payments. Here how it works, you buy the products and charge to a store credit card (ie: Best Buy, or Circuit City) under the plan you make a small payment per month toward the minimum balance. You can never be late with your minimum payment. When the bill is due years later you must pay it in full on the balance due. If you carry that bill even one additional month you end up getting a bill for all the deferred interest that was waived for the first few years, usually at a outrageous rate of 25-30%+. These do not work like a regular credit card. I think there should be some regulation on how these programs work. Therefore a $1000.00 purchase could be hit with a $600.00 or more interest bill after only two years. If you are late with the min payment in a given month they add all deffered interest at that point. these cards cover the highest interest rates in the entire US. If you are going to take advantage of this promotion make sure you manage the bills closely. Auto pay the minimum if possible, online or otherwise. A month before the final bill is due, pay down the entire balance by sending in payment with a registered letter to prove delivery. Make sure that you account is zeroed out after the final payment is made. If you can manage the card online, do so. So many people get ripped off on these plans. Make sure you are getting the best del on the products you are buying. Remember buy the products not the deal. If you can’t afford the stuff don’t buy it. Electronics depreciate at a record pace so what you don’t buy know, may be less 6 months or a year from now.

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Tags: best buy, circuit city, credit, deferred payment plans

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