Q: Should I consider a no interest, no payments offer? Good question. Here are the particulars on this type of program. For a period of time, both interest and payments may be deferred. Often, it is a combination of both. That may sound attractive, but there are risks. If you do not pay off the balance within the one year time frame, you will be charged interest. More alarmingly, you will be charged interest retroactively. Meaning, interest charges are calculated from the day you purchased the item. Even worse, the interest rate is often higher than most other loan arrangements. Why are these programs so popular? In my experience, people who use these types of programs are usually purchasing something they can't afford. If they had the money, they would just pay cash. But often they don't, so this is a way to buy today, and hopefully pay tomorrow. Here is a question I must ask myself if I am considering one of these programs: If I cannot afford the item today, what makes me think I will have the money when the bill comes due tomorrow? I would rather wait until I have the money, and if possible, just pay cash for whatever I need. If you have a financial question for Ross, you can use the Marino on Money page.
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