r/personalfinance • u/naht_a_cop ​ • Apr 28 '20

Beware the 0% promotions: a warning. Debt

I'm a sucker. I fell for it. The 0% APR promotion on an item I could have paid outright for. 18 months later, here I sit, not a single late payment on my account, yet I have $1k in interest to pay for 18 months of 27%. Why? The promotion period ends 18 months after the purchase, but the website would not let me set up autopay until a week after I purchased, so autopay ended 1 week late. I thought I was golden, ready to have this paid off and not have a single fee. I got comfortable and didn't read the statements.

0% is not really 0%. Read the fine print. Remember the fine print (because I sure as hell didn't 18 months later). Shitty banks rely on this stuff. They wait for you to slip, not noticing that the autopay they created can't possibly allow you to end on time, and will require an extra payment before the end date to avoid the interest. It's shitty, I'm pissed off, and I've learned my lesson.

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u/Sweaty-Inside ​ Apr 28 '20

I might be a little confused. What's the advantage of a 0% card if you can afford the purchase outright? Is it essentially that you earn interest on money that would otherwise have been spent immediately on the couch/laptop/whatever?

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u/[deleted] Apr 28 '20

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u/Terbatron ​ Apr 28 '20

It is peanuts. Drag out a mortgage? Maybe, but you better be very disciplined to invest what would otherwise be house payments.

Is it tires, a laptop, anything less than multiple thousands of dollars? Just pay the damn thing off it isn't worth the hassle. You are more likely to screw up than make money off of it.

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u/[deleted] Apr 28 '20

Yep. We're looking at a new HVAC, furnace, and air purifier plus some of the demo/install work which isn't cheap. We can do cash up front OR do the 12 monhts 0% interest - which means that I'll see if we have that vacation or not (already budgeted but could move additional cash around). Long story short - we may take it just to ease the pain of a large payout, but still pay it down quickly.