18-Month Financing BEST BUY

[collinlmarshall]

Hello everyone, so I needed some help. Recently I just broke my phone. I need a new phone but I do not currently have the money to do so. At Best Buy they have a phone called the Moto x Pure for $249.99 without taxes. I don't have the money but I know when Christmas comes around I will end up having around $320-$400. I need the phone ASAP. Should I get the Best Buy credit card, buy the phone with it, then pay the balance off with my Christmas money?

http://www.bestbuy.com/site/financi...ns/pcmcat225000050029.c?id=pcmcat225000050029

 

[thejoshhoward]

I've been taking advantage of this sort of financing deal for about 16 years now. It can be a great financial tool, but only if you always make minimum payments each month and go zero balance before the promotion ends. I've had a few friends use a card like that and totally screw up, paying all the interest at the end of the deal because they either forgot or something went financially wrong in their lives.

So, I think it's fantastic. But do be careful.

 

[collinlmarshall]

So if I miss one monthly payment then what happens? Sorry I am new to this.

 

[thejoshhoward]

If you miss just one payment, they are legally allowed to charge you with all the interest dating back to the original purchase date. i.e. if you've made 12 payments, but miss the 13th one, you become responsible for the accrued interest for the past 12 months.

 

[dangerfish]

I always take advantage of zero % financing options, even if I have the cash to pay out right because it's basically free money. But don't dare be one day late with a payment and make sure you pay it off before the end of 18 months or you will get stung with interest for the entire period.

 

[phrehdd]

Does early pay off reduce interest and is there any penalties?

 

[iWombBanger]

Early payoff will reduce or even eliminate interest. I don't believe any credit cards carry penalties for early payoff.

 

[Nick11Mac]

18 mos. interest free means no interest if all is paid within that time period. But if not, then all the interest from the beginning becomes due and payable.

 

[dangerfish]

Does early pay off reduce interest and is there any penalties?

There is no interest if paid off before 18 months. You can pay it off in 1 month or 17; its all interest free. If you miss a minimum payment or don't get it paid off in 18 months, then you will be on the hook for the entire interest bill. So don't screw that part up.