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Interest Free Credit !!!
14-10-2005, 11:27 AM
Post: #1
Interest Free Credit !!!

Back in July our Telly went dead so we went round to Comet to get a new one.

We were expecting to pay about £500 for one but got sales talked into a big flat screened thing costing just over £1,000 (yeah daft I know cos I've now seen similar reduced to £699 Sad

The salesman said they were doing 12 months interest free credit so we decided to pay the £500 we had anticipated spending, as a deposit, and spread the rest over 12 months being as it was interest free.

Mr. C signed all the paperwork and, as you may know if you've ever had credit, there are pages and pages of small print that you never really read properly.

Next thing, in the post up pops an Edge credit/store card.

On checking our bank statements we realised that they were only taking (by direct debit) the minimum payment of £25 per month which means that it wouldn't be paid off within the interest free period. Crafty or what?

Mr C phoned them up this morning and after 15 minutes of recorded messages and waiting in a queue he got to speak to somebody human.

He asked her to increase the amount being taken on the Direct Debit to £50 per month. Oh, no, they can't do that!!! You can trawl down the bank every month and pay in extra if you want it to finish within the 12 months but they won't increase the Direct Debit!!

So yes, you do get 12 months interest free credit but they make sure that it runs into the interest added period of course.

Mr C was tempted to pay it all off in one go but I thought we might as well let it run til next July and then pay off what's left before it accrues any interest.

Anyone considering buying anything on Interest Free Credit should remember this because I think it's a bit of a scam.
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14-10-2005, 11:59 AM
Post: #2
Interest Free Credit !!!
It isnt a scam. Its been happening for years. Normally its called an 'Interest Free Option'.

Basically you do as you have done. You pay a deposit, you then pay however many small payments you have agreed to pay, and then at the end you can either pay the balance (which makes is Interest Free), or continue to spread the payments .... but this time they bump on a HUGE amount of interest.

This happened to me about 10 years ago. I bought a Playstation, and it was one of the original ones and cost about £400. I paid the deposit, and then paid £12 a month. The final bill came in for about £200.

In the meantime though, my cat had been very poorly and i needed to pay for her vet treatment - which took the £200 i had saved.

I paid for that damn Playstation for £4 years :ninja: I think it ended up costing me about £600 !!

I'm not perfect, but im so close it scares me
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14-10-2005, 12:28 PM
Post: #3
Interest Free Credit !!!
Oh I see Bonnie, but this wasn't explained to us at the time. We stupidly thought they would take enough on the direct debit to finish it in 12 months, thus costing nothing extra.

I think the problem here is the Salesman not telling us exactly what happens. I realise, of course, that these credit/store card companies don't work for nothing and they will do all they can to get you to pay interest but I don't think it was explained properly to us at the time.

You really have to keep your finger on the pulse because it's so easy to get sucked into these things if you're not careful.

It's awful that you had to pay over the top for the Playstation Bonnie. We just never know what's round the corner when we sign up for these things and an unexpected bill can knock you sideways.
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14-10-2005, 12:32 PM
Post: #4
Interest Free Credit !!!
I won't buy anything on credit. I hate paying off the balance on something that I've had for a while. Saying that though, I know that at times for people it is the only way they can go, and interest free credit works for a lot of people. But like Bonnie says they slap that interest on after the free period, plus the money can get eaten up elsewhere as in Bonnie's vet's bill.

Glad it hasn't ended you up in dire straits, Crit. Smile

"You cannot teach people anything. You can only help them discover it within themselves."
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