by Caroline E. Mayer, February 10, 2009
Buy a $2,000 TV on credit and don’t pay interest for a year! Purchase a refrigerator, interest-free for three years! Such offers may sound tempting but if you’re not careful, you could lose a lot of money.
If you miss a monthly payment (often 1 percent of the balance), pay it late—by even a few hours—or fail to pay the balance by the deadline, you could be charged the entire interest retroactively from the date of purchase. And interest rates on these deals are high—“19.8 percent, sometimes higher,” says Gerri Detweiler, credit adviser at Credit.com.
An interest-free deal is good “for someone who is disciplined and has good credit. It can allow you to keep your own money in the bank and benefit from the float. But the traps are numerous,” she says, which means your $2,000 TV that came with a year of interest-free credit could end up costing $2,400 or more.
Caroline E. Mayer is a consumer reporter and lives in Arlington, Va.
Please leave your comment below.
You must be logged in to leave a comment.
Members save 20% on purchases or $20 when they spend $79.99 or more.
Exclusive program for members from The Hartford.
Get tips and resources to protect yourself from fraud and see the latest scam alerts in your state.
AARP members receive exclusive member benefits & affect social change.
You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits.
Your email address is now confirmed.
Manage your email preferences and tell us which topics interest you so that we can prioritize the information you receive.
Explore all that AARP has to offer.
In the next 24 hours, you will receive an email to confirm your subscription to receive emails
related to AARP volunteering. Once you confirm that subscription, you will regularly
receive communications related to AARP volunteering. In the meantime, please feel free
to search for ways to make a difference in your community at