interest free periods

How to Make the Most of Interest Free Periods

Many catalogues offer interest free financing to their customers. However, not all customers properly utilise these periods, and often end up paying more interest, because they missed the cutoff period for repayments. So, make sure you understand interest free periods, and properly utilise them, to ensure the most out of your shopping experiences.

Know the duration

If interest free repayment is offered for 3-months, make sure you pay off the entire purchase price by that period. If not, you will not only pay interest going forward on items you purchased, you likely will pay back-interest from the original purchase price for items you finance through catalogue sites as well.

Understand missed payment terms

Some catalogues may offer a grace period, and won’t end your interest free terms, simply because of a missed or late payment. But, with most, if you do miss a payment, or are late beyond the grace period, your interest-free repayment status is typically wiped out. And, from that point forward, you’ll pay the variable APR you agreed to with the catalogue site.

Know what you can buy

When shopping, some items may qualify for interest-free while others don’t. You only want to combine interest-free items together when purchasing, otherwise you’re going to pay interest on items you otherwise would avoid interest fees on, because of improper purchase management.

Understand late payment penalties

Like the missed payment, certain catalogues will absolve your interest-free financing if you are late on a payment. So, this is something you want to avoid at all costs if you are financing items on interest free terms. Make sure you know the terms, limits, and understand penalties if you are late on a payment.

Know the real interest (for late/missed payments)

If you do lose your interest-free status, you should also be aware of the variable APR for the interest you will pay going forward. With many catalogues, you won’t pay the interest rate your credit line is approved for but will typically pay the highest APR rate with the catalogue you finance with.

Purchase wisely (and consider higher-priced items when shopping)

When you plan on using interest free financing, choose it for the right items. Go with high-ticket items, which offer you 48 or 60-month repayments. Not only will this evenly spread the cost of these items but will also ensure a very low monthly payment is made, when you are financing the purchase of clothing, shoes, or high-priced electricals and appliances for your home via catalogue shopping sites.

Interest free is a great way to finance the price of items you truly want to buy, without having to incur huge interest rates and fees on those items. But, you have to properly utilise those periods, understand the terms and conditions, and know what the penalties are, in the event you miss or are late with your payments. Properly utilising interest free payments allows you to buy more, enjoy more, and save quite a bit. So, understand the terms before you finance.