Cost Cutters - Zero Interest, Zero Payments

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On tonight's Cost Cutters, advice on those teasers that offer zero interest and zero payments for 12 months or longer.

Some of those ads are really strong. "Pay nothing for a year" or "No interest, no payment for a whole year" or "Interest free finance option for 12 months".

But be forewarned: many of those deals end up costing much more than the advertised price.

Before you rush out and sign the dotted line, be sure to check the fine print.

On some of those contracts, if you make no payment for 12 months, then start to pay it off, the interest on your balance could suddenly become 20% or more.

The deal is usually only good if you pay these interest free deals off before the 12 months is over. But, make all the payments when they are due and don't be late. If you don't, that bargain becomes a financial nightmare you can't afford.

Here's one example of the fine print:

"The no interest option means there is no interest if your purchase is paid in full within 12 months after the date of purchase; otherwise, Interest accrues from date of purchase at the regular APR. That is 23.40%. The APR may vary."

For example, if yo deferred a $4,000 purchase and didn't pay anything for 12 months, nearly $1,000 would be added to the purchase price in interest.

Bottom line, if you decide to take advantage of these offers, make sure you pay off the entire amount during the interest free period. Otherwise, your bargain isn't a bargain and you're out a lot of money.


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