Have you ever wondered how retailers can possibly afford to offer the no-interest, no-payments, no-money down kind of deals you see advertised? That was the subject of a question I received recently.
Dear Mary: There are several appliance, electronics and furniture stores in our area that run television commercials offering nothing down — no interest and no payments until 2022. It sounds like I can just walk in and take what I want and not pay for three years! How do these companies really make money? — Kate
Dear Kate: First, these offers are on approved credit and come with a lot of other fine print. You need pristine credit to qualify for those attractive terms.
GOOD LUCK QUALIFYING
One retailer told me only about 25% of the people who apply for these amazing no-interest, no-payments offers can actually qualify. The other 75% are offered some other deal with horrible terms. People often accept these terms because, by the time they fill out the paperwork, they're so emotionally involved and have their hearts set on that "free" deal that they're ready to sign anything.
TERMS AND CONDITIONS
Let's say you're one of the 25% who qualify. You have $3,000 sitting in the bank. You could pay cash for that 65-inch class 4K Ultra HD OLED TV. Instead, you decide to go for the nothing-down deal so you can earn interest on your money until 2022. Furthermore, you still have to fill out and sign a credit application. And that requires a credit check. Finally, you have to agree to very steep interest (plan on 27.99% or more), which is deferred (not waived) until 2022.
The contract will read that if you are late paying that entire balance in full, you lose your deferment and owe interest back to the day you signed the contract. From that moment on, you must begin making enormous payments.
Whenever you sign a contract or application of any kind, remember this: What the large print giveth the fine print taketh away.
DEAR MARY: I just have to say thank you! I recently purchased the Shark Navigator Lift-Away Professional vacuum that you have written about — even though I have a good vacuum and am trying to minimize my possessions. Oh, my! I have been vacuuming for a week straight and am still getting dirt out of my family room carpeting. What's more, it even feels like new carpeting under our feet. Not to mention that this machine is beautiful — white and silver! This is just indicative of the numerous ways your wisdom and insight has blessed me and my family. Hope I get to see you in person again sometime (I was in the audience when you spoke in Naperville, Illinois, several years ago). — Nancy
DEAR NANCY: Yours is the ninth message I've received just this week from readers who are ecstatic over their Shark vacuums. I know the feeling. I get it every time I put my Sharky to work. I have moved from being embarrassed by what he gets out of the carpet to feeling kinda self-righteous, knowing that, finally, my carpeting is really clean. Now it's easy to keep it that way.
It's great to hear from you and to recall that evening in Naperville. Knowing that you were there makes that memory extra special.
Would you like more information? Go to EverydayCheapskate.com for links and resources for recommended products and services in this column. Mary invites questions, comments and tips at EverydayCheapskate.com, "Ask Mary." This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of EverydayCheapskate.com, a lifestyle blog, and the author of the book "Debt-Proof Living."
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