Buying on Credit? Read the Fine Print
Posted December 24, 1997
RALEIGH — "Buy now, pay later." It sounds like a great deal. You get your stuff now, and you don't have to worry about paying for it for months -- sometimes, even a year. But when that time is up, you might find yourself paying more than you thought.
That's right -- the interest can be even higher than your credit cards. Credit counselors say it's fine to take advantage of no payments till next year. Just be sure check the fine print and pay it off before the heavy interest kicks in.
We've all seen the ads. So what does consumer credit counselor Wayne Freeman think of them?
"The first thing I think is, 'What a deal!' But, look at the fine print to see whether or not it is a deal."
For instance, Herbert Battle bought a Sony Trinitron Wednesday morning at Circuit City. He paid cash, but the store's circular says he could finance it with no payments and no interest until July. But, if you don't pay every penny by July, you'll be charged interest all the way back to the date of purchase.
Counselor Wayne Freeman says the key is knowing yourself, your finances and your deal.
"If I thought I could pay for it within the promotion's period, then, yes, it's a good deal."
Typically, these promotions focus on big ticket items, like furniture, cars, appliances, or electronics. But, when the interest starts, watch out. It can be more than 20 percent.
The bottom line: Whether these deals save you money depends on one thing -- whether you pay the balance on time.
Credit Counselor Wayne Freeman also advises that you always ask for a disclosure statement with the cash price, credit price, interest rate and terms of the agreement. Retailers are required to provide it but you may not get it unless you ask.