Every time I mention “financing,” I encounter people who talk about the evils of credit cards, the merits of cash, and how horrible I am for “giving the bank money.” The fact is, financing or using credit cards does not mean I’m paying even a cent more than I would with cash; it means I’m being picky about how I pay and I’m making informed choices to ensure that I’m getting the best deal.
Over the years I’ve made some big purchases, and though I didn’t always have the cash up front, I wanted to avoid paying interest at all costs. Fortunately, many businesses extend free financing to customers with a good credit rating, and I’ve taken advantage of several offers. Here are a few ways I’ve used free financing to pay the same as I would with cash over a longer period of time.
A few years ago I completed a DIY screening-in of my back porch. The total bill came in right under $400 for the screen, indoor-outdoor carpet, metal framework, and miscellaneous hardware. Home Depot offers interest-free financing for up to six months for purchases of $299 or more, so I qualified. I did have to make minimum monthly payments, but I paid off the entire amount in three months, paying no interest and no extra money.
My porch project was so successful that I decided to (partially) remodel a bathroom. This time I went to Lowe’s, which offered financing almost identical to Home Depot’s. My tab for the bathroom was just over $700, and I took four months to pay it in full. The minimum payment requirement was the same, though I paid more than that monthly; the one catch was that I had to purchase everything at one time, on one receipt. I forgot to buy a can of wall texture spray and had to buy it separately, but that was the only thing I paid cash for.
I’m sure other service centers offer similar deals, but I’m a Firestone fan and their card has come in handy many times. When I drove a much older car in college, I lived in fear of an unforeseen breakdown, and twice I financed some pretty hefty repair bills – absolutely free – for six months, including one when I was traveling alone, out of state.
Rooms-to-Go makes no secret of their extended interest-free financing, and I used it a few years ago to buy a $1200 entertainment center. Their promotions do vary, and I waited a few months till I saw an offer I really liked – two years with no interest. Like most financing, I had to make minimum monthly payments, but I paid off the full amount well within the time frame, so I paid no extra in interest.
Most recently, I’ve discovered the virtues of GE Money, which offers a variety of special financing deals for a number of different businesses, from automotive service centers to wedding dress shops. I happened upon them by accident while financing a sofa (free for 24 months!) at a furniture store, and I discovered I could search for other affiliated retailers on their website. Though probably the hardest to qualify for credit score wise, GE Money offers the widest range of financing options and isn’t limited to a single business.
If you purchase with free financing, there is usually one major catch, no matter who you deal with. If you fail to pay the item off in full during the free period, interest will accrue from the date of purchase, which will cost you a bundle in extra fees. You can also run into trouble if you fail to make monthly payments on time, as that will sometimes cancel your deal. With those things in mind, interest-free financing is a great offer to take advantage of wisely, as long as you have a solid plan to pay the bill in full.
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