Monday’s tip from Money Mom: “No payments until 2009” may cost more than you think!
By Consumers Union on Monday, December 17th, 2007
Consumers Union’s Money Mom says: “buy now, pay later” is an invitation to financial trouble.
Some “pay later” programs only delay the payments, not the interest. Under many “no payments” programs, the fine print says that you get a time of “no interest” only if you pay the full purchase price by the end of the no payments period. If you don’t have the money now to pay cash upfront, chances are you won’t have it at the end of the deferral period either. If you need to make monthly payments when the “no payments” time is up, you may owe interest going back to the date of the initial purchase. You can also be socked with interest starting from the purchase date if your account is not “current” – for example, you have charged other items with the seller and you forget to mail your payment on time, or you mail it on time, but it doesn’t arrive on time.
Starting in the New Year, Money Mom will offer family finance tips every Monday here at the Daily Dollar blog: http://www.consumersunion.org/blog.html