Buy Now, Pay Later, Be Happy?

By Sabrina Biehl Published Jul 22, 2014 01:40 pm Updated Feb 3, 2015 10:48 am

Your place is in desperate need of a style overhaul but your bank account is in major need of a cash injection. Yep. Familiar tale. Thankfully, there may be ways for you to complete the projects you have earmarked or add stylish or useful new pieces without a big dollar outlay. All you need is decent credit and a little discipline.

Interest-free credit. It sounds like an oxymoron, but actually it’s a consumer’s best friend. Free credit offers for cars mean you can make interest-free payments, which mean you can get more car for less money. The same concept can work for furniture, home furnishings, appliances, and other stuff to make your home work and look better. Almost every large retailer has an interest-free offer right now, meaning you could essentially fix up your place from top to bottom without emptying your savings account, as long as you can manage the monthly payments responsibly.

“If you’ve made a big purchase in the past few years, chances are you’ve been offered a deferred-interest plan along the lines of ‘no interest if paid in full in 12 months,'” said Bankrate. “The programs are common in stores that sell high-dollar merchandise such as furniture, electronics and other pricey goods.

But, there is a “buyer beware” tale to this. “Play by the rules, and you get a no-interest loan. However, if you go too late on a payment, misinterpret the payoff date or lose your ability to pay, you could end up with a hefty interest rate plus retroactive interest added to the bill,” they added. “This isn’t a zero percent loan until the end of the promotional period. The interest is actually accruing, and the bank is just waiving the interest payments. If you pay the entire loan within a set period of time, the interest is forgiven. If the balance isn’t paid within the deferment period, the interest that’s been accumulating is added ‘in a lump sum’ to your balance. Going forward, you pay interest at the preset rate.”

That rate can be hefty, anywhere from 13 to 21 percent or higher according to Bankrate’s research. They also caution against the potential negative effect these offers can sometimes have on your credit.

“Many times that available line of credit on your new card is equal to the total you’re purchasing. So, in essence, you’re opening up a maxed-out credit card, which doesn’t look good on your credit report.” It can also damage your credit score if your available credit is too low. So if you are currently saving for a home or are trying to improve your credit, this may not be a good way to go.

Still interested? Check out some of the current no interest offers out there.

Need a new mattress? Mattress Firm, SleepExperts, Sears are all offering no interest for up to five years.

Best Buy has several no interest programs, including no interest for 18 months on all HDTV, home theater and Geek Squad®home theater installation purchases totaling $599 and up.

A better functioning fridge more on your radar? How about new floors? Or those countertops that will finally turn your kitchen from a mixed-up mess into a modern space? No interest programs at Home Depot and Lowe’s can make it happen. Home Depot’s most generous offer is no interest for 24 months on purchases of $1,999 or more. At Lowe’s, the no interest period is lower, but so is the minimum purchase. Special financing includes 18 months no interest for purchases from $299.

Rooms To Go and Macy’s are just a few of the retailers offering zero percent interest on furniture, which means that new couch or bedroom set could be yours with manageable monthly payments instead of a large withdrawal.