No Interest for 12 Months

We recently bought a new sofa. We had the money for it, but they offered no interest for 12 months. Why wouldn’t you do that? So we did.

I was assuming with interest rates still super low, this is a promotion to encourage sales. Ha, silly me.

It’s a nice couch, so a little over a grand. We added a nice table so all total almost two grand. I get the first bill and the payment is $54.

I actually like math, so this leaped out at me. At that rate we would not only not pay it off in the interest free 12 months, we wouldn’t pay it off in 24 months. And the web site not only gave no indication of that fact, it makes paying something other than the minimum rather difficult.

So that’s the scam. Offer no interest but set it up so that most folks won’t notice that it’s going on for years and you will end up paying a healthy chunk of interest. Nice.

I was about to just pay the whole thing off, but on reflection I will make sure to pay over the full twelve months and backload the final payment.

Because I actually like math…