Which is better, 90 days no interest, no payments or 6 months no interest?
Many stores offer a variety of gimmicks to try and get you to apply for credit at a particular store. Most of the time these gimmicks come during a three day weekend or at the end of the year when the stores are trying to get rid of some of their inventory. But regardless of when these kinds of programs are offered they all mean the same thing, they are just another gimmick to get you to buy merchandise at that particular store. The only difference is what the store has to offer you and most of the time it is some kind of easy credit term that gives you 90 days no interest and no payments or even 6 months of no payments.
So now that you know about the various offers that are used to get you to spend money or to apply for credit at a particular store you might be asking yourself which would be the better deal. But the truth of the matter is that regardless of what offer you accept they both have potential benefits and drawbacks, so it's good to know about the various offers before accepting one. So before trying to decide which offer is better let's take a look at the 90 days no interest and no payments offer and the 6 months of no interest to see which offer would be a better choice for you to make, but be sure to read the fine print.
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For those of you who are unaware of this offer it is actually a pretty familiar offer. It is actually a really good offer if you can actually pay off the purchase in less than ninety days. The reason why this offer would be great if you could pay off the item in ninety days is because you would not be paying any interest, which means that the item that you purchased actually didn't cost you more in the long run because you never once had to make an interest payment on it. But in other cases people can't afford to pay off the item in ninety days or they choose not to pay it off and then the offer actually turns unattractive. The reason for this is that once the ninety day period is over you are going to get charged a huge finance charge all at once on the principal balance. What this does is it increases your balance due from the start and then you are going to end up accruing interest on a monthly basis until the full amount is paid off. So in addition to the principal you are going to be charged a lump sum for a finance charge for the first three months and then you will be getting charged interest on top of that.
Now the other offer that we are discussing is the 6 months with no interest. This offer actually requires you to make a monthly payment for the first six months. And because you are actually making a monthly payment you are going to be reducing your principal balance before the six months is up. So what this means is that even if you don't pay off the entire balance before the six months you are going to be paying interest on a smaller amount, which means less interest actually owed.
So in looking at both of the offers it is actually safe to say that the 6 months no interest is actually the better deal. The reason why is that because you have to make payments on your principal you are reducing the principal during the first six months, which means less interest that you will owe when the six months comes up.
