When companies advertise “No Payments Until…” or “Zero Percent Interest”, be informed about what they’re really offering. What most people don’t see in the fine print often costs them a lot more than they anticipated.

Let us use an example of “Zero Percent Interest until July 2008” for an item purchased in July 2007. Many people purchase expensive items under these conditions, believing they get them virtually “free” for 12 months, and can then start making payments in July 2008.

While it is true that no payments are required during the offer period, interest charges will accrue for that entire 12 months and will promptly be added to the “amount due” in July 2008. So in July 2008, when required payments begin, the balance due will be for the cost of the item plus 12 months worth of “deferred finance charges”; on top of which more interest will accrue.

The same holds true for “No Payments Until” offers. No payments are due, but if the item is not paid off entirely by the “until” date, all of the accumulated interest will then be added to the amount due, and additional interest will accrue on the total balance.

Take the example of a couple that purchases a new couch for $1300 on a 12-month “no payments or no interest” offer. They could expect interest rates in excess of 20% and therefore should anticipate interest due of $250 or more by the end of the 12-month period.

The only way to “truly” have zero percent interest on either offer, would be to pay off the item in full before the “until” date on the offer.

About The Author:


Marie Spaulding is the founder of the Debt Payoff Plan, an online service that helps people get out of debt fast, by giving them an easy to follow payoff plan with an ultimate goal of a Debt Free Date.

Find out how fast you can get out of debt with your own Debt Payoff Plan http://www.debtpayoffplan.com