Six-Months-Same-as-Cash Deals
Is This Interest-Free Buying Incentive Really Worth It?
How to take advantage of six-months-same-as-cash. What to watch out for and the risk of penalties. Are there alternatives to what is basically an interest-free loan?
That flat screen TV you have your eye on becomes even more enticing when you learn that if you buy now, you’ll receive six-months-same-as-cash. Is it a good deal, or not?
What to Watch Out for When Taking Advantage of Six-Months-Same-as-Cash Deals:
Learn what the penalties are. You have every intention of paying in full within six months. Then something happens. You lose your job, you get sick and miss work, your car needs repair. Whatever the reason, creditors really don't care. What they do care about is getting paid. In fact, they count on people who miss the deadline. Because if you’re even one day late, you could be charged back-interest for the entire six-month period. So only take advantage of six-months-same-as-cash if you know you can pay the entire bill well before the due date.
Read the fine print. Find out the exact due date and what the late fees are. What happens if you only make a partial payment in half a year’s time? You need to know the answers to these questions before you buy anything. Once you sign the credit card receipt, you’re bound by the contract between you and that merchant.
Is Six-Months-Same-As-Cash a Good Idea at All?
Yes, it’s basically an interest free loan for six months. But a lot of times the penalties are very steep if you miss, or are late on even one payment. So if you can’t pay the entire balance of the loan within half a year, don’t do it...unless paying exorbitant interest rates is not a problem for you.
Alternatives to Six-Months-Same-as-Cash:
- Pay cash. You’ll never get into trouble and you won’t buy what you can’t afford. But if this item is something you have to have right now, consider a low interest personal loan from the bank. At least you’ll know the interest rate upfront and there are no surprises.
- Lay away. Some stores still offer this time-honored tradition. You put down a deposit and the store holds the item for you until you pay in full. There’s no interest and no stress. Lay aways are a good idea for merchandise that is likely to sell out before you come up with the money to buy it.
- Take out a home equity line of credit. If you need to fund home improvements, a HELOC might be a better idea than six-months-same-as-cash. And there may be tax advantages as well.
So the next time you see a television commercial advertising, "No money down, six-months-same-as-cash, buy now!" you might want to ask yourself, is this deal ultimately worth the price?
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