0% interest free credit.

[gavroche]

I have always been wondering how finance companies make any money on the above. Can anyone enlighten me? Just curious.

 

[Puddles]

I have always been wondering how finance companies make any money on the above. Can anyone enlighten me? Just curious.

If you dont pay within the set period of time the rates are ouchy... lots of people anticipate paying and then don't

 

[Bodhbh]

^^ you make yourself a noose.

 

[Over The Hill]

That is what my bank pay me on my current account and they seem to be dong well out of it.

 

[gbb]

It can be a useful tool...but slip up and you pay.
Most of our reasonable sized purchaces could be paid in cash but that depletes the bank balance..something we like to see as a safeguard, so we very often use interest free, usually over a year. It's worked well over the years, except one occasion.
We'd brought a TV, circa £1300. We miscalculated the last payment and missed the deadline, it cost us another £500. That hurt..... Our fault, but bugger...£1800 for a £1300 TV.

 

[young Ed]

It can be a useful tool...but slip up and you pay.
Most of our reasonable sized purchaces could be paid in cash but that depletes the bank balance..something we like to see as a safeguard, so we very often use interest free, usually over a year. It's worked well over the years, except one occasion.
We'd brought a TV, circa £1300. We miscalculated the last payment and missed the deadline, it cost us another £500. That hurt..... Our fault, but bugger...£1800 for a £1300 TV.

exactly like in your case is how they make their dosh, they count on a few people not paying off in the interest free period and they hit these people like a wrecking ball!
basically if you end up not paying with in the interest free period you get a MEGA interest rate
Cheers Ed

 

[gbb]

exactly like in your case is how they make their dosh, they count on a few people not paying off in the interest free period and they hit these people like a wrecking ball!
basically if you end up not paying with in the interest free period you get a MEGA interest rate
Cheers Ed

Yep, thats what hurt. We all know it..

 

[Andrew_P]

The retailer pays the interest charged albeit at a lower rate, and normally recoups it by charging the normal RRP on the big ticket item.

 

[Andrew_P]

As User points out it is just another sales tool.

 

[Pro Tour Punditry]

witchcraft

 

[Vapin' Joe]

The retailer pays the interest charged albeit at a lower rate, and normally recoups it by charging the normal RRP on the big ticket item.

Wot e' said.

 

[Ern1e]

It's a magic word is free ! I have always found that nothing in this life is ever FREE there is always some catch to it lol.

 

[jnrmczip]

They make a fortune on late fees which are sometimes twice the amount of the monthly payment. It is however a good thing if you can afford it but don't want to pay a large sum upfront.

 

[vickster]

I've used it and interest free credit cards a few times, kitchen, bed, never a car. I could afford to buy the things outright but why do so if not needed. I just set up a direct debit to cover the necessary payments

Apparently it's good to keep the credit rating ticking over, also the reason why I'm not paying off the mortgage quicker,with interest rates so low, there's not a lot of point having more savings. I use a credit card for most purchases too, paid off monthly. Might as well leave the cash in the current account and get the points (tesco club card)

I wouldn't use credit to buy anything I couldn't afford however, not least as I hate paying fees to banks and other financial institutions!

 

[gbb]

The retailer pays the interest charged albeit at a lower rate, and normally recoups it by charging the normal RRP on the big ticket item.

Not sure about that...
Normally recoups it might be stretching it a bit...if youre shopping for anything, you always know what price it is before you decide if youre going to pay cash or go credit..
He (the seller) doesnt know when the price is set how a customer is going to pay...and he cant change it once youve decided.