No Payments For 90 Days

Three months that are free from payments, but not from stress

Sep 7, 2011 | WRITTEN BY CHRIS RUSSELL

A lot can happen in three months.

A college football season plays out. You go through the on-boarding process if you are hired to work for Dave. The cost of a 90-days-same-as-cash purchase can skyrocket.

We're not kidding. When it comes to making a purchase, 90 days is NOT the same as cash.

When you buy a TV or a couch and bring it home on a three-month financing deal, the clock is ticking. You can't fully enjoy the item because you know, in the back of your mind, you don't own it yet.

Even if you mark the payoff date on your calendar, you'll get distracted. You may be out of town on vacation or business, or go over budget and run short of money, or you just plain don't pay it off. The fact is, 88% of these deals convert to debt—the odds are against you making that deadline.

If you miss it, you'll get slugged with so many fees and interest charges (including back-charging you on the interest rate to the date of the purchase) you'll feel like Rocky Balboa after the fight with Clubber Lang in Rocky III ... the first fight.

Check out Frugal Dad's great post on the subject of no payments for 90 days.

You've heard that the shortest distance between two points is a straight line. Well, the quickest way to buy something is to pay for it. When any type of "creative financing" comes into play, it means you can't afford the item. Each time a person buys something by borrowing for it (with the exception of a conservative mortgage), it slowly whittles away at their peace of mind.

Sooner or later, you'll miss a payment or the company you bought the item from will make some "error." Then your payment becomes bigger, your credit report is trashed, the collectors start calling and the "stuff" doesn't seem too awesome anymore.

No item is so valuable that it must be bought now. Have some patience, figure out how much the item costs and come up with a savings plan where you save a little at a time. Once you’ve done so, take your cash to the store and tell the manager you want a bargain or you'll go to another store.

It's much cheaper to do it that way. And much less painful, too.

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