I know you have been offered an Interest Free Financing deal at least once in your life. They are so common, it would be nearly impossible not to (almost as impossible as never being offered a "pre-approved" credit card). And it sounds like a great deal, doesn't it? No interest for a certain period of time, and then just make sure to pay it off before the end date and you saved yourself some money!
Of course it hardly ever works out that nicely - most Americans do not pay off their balance before the end of the "interest-free" period. And I am one of those Americans. I stupidly fell for the gimmick, and signed up for a 12 month interest free credit card. Of course, I did not pay it off before the end of the 12 months, and ended up accruing ALL of the interest for the total 12 months. At a 24.9% APR! As Dave Ramsey would say, I just paid a "stupid tax."
Now I am working to pay off another (yes, I fell for it twice) interest free credit card before the interest is accrued in February. If you are diligent, these credit cards can be a good deal. But if you are normal and not so diligent, then they become very expensive very quickly. I agree with the experts: stay away from anything that sounds too good to be true, including "interest-free" financing offers.
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