Question about zero percent finance?
Ok i went to best buy last month and bought a TV with 0% for 24 months. The TV was 1450 and i got a limit of 1400. i pd 50 in cash. now i have 500 dollars in cash should i put in savings at 4% or pay tword the credit card.
Tags: Zero, percent, credit card question, question, finance, about, best buyRelated posts:
It depends upon the terms of the credit agreement but if you say you have 14 months left with no interest being charged I would put the money in a term deposit that matures 1 month before the payment of the credit bill is due. This will keep you from spending the money on something else.
The interest on the term deposit will be taxable at whatever your tax rate is but the net effect is you will come out a couple of bucks ahead.
If you are the type that would probably spend the money on some other item rather than to save it I would put it on the Best Buy charge account.
Remember when it starts to bill you the interest and you have not paid it off it will be at about 28%!!!!!!!!!!!!!!!
These deals are designed to trap financial idiots. If you don’t pay every nickel before the due date, the interest cost is horrible.
If you were financially sophiticated, you wouldn’t ask this question. Pay it as soon as you can so you don’t get trapped.
Well if you trust yourself not spend the cash then yes put it in a savings account and don’t touch the money until just before you need to pay.
But if you just bought a nice (HD-Ready?) TV then like me you like your tech stuff and will use the money ’saved’ to buy something else! In this case clear the balance asap.
These finance deals in general are really to rip people off because the rate they charge you when the interest free period is over (24months) is so high they ‘take back’ all the ‘free’ cash they gave you.
Its like this, if for some reason you can’t pay for it in 24 months, at the end of that you will owe all the interest accumulated during that 24 months at their % rate.
Paid towards the card. For several reasons:
1) The fact that you are very high on yoru limit means it could be hurting your score unless you have lots of other available credit on other cards.
2) did you read the fine print? A lot of the time, they have that 0% period– but if you do not pay it in FULL by the time it expires, they add the interest from that moment all the way back to the original purchase date, for the fullpurchase amount!! Leaving just a penny on there could cost you hundreds.