Wednesday, February 29, 2012

You can get slammed with interest on those no interest store credit card deals

I am no fan of same as cash offers.  You need to read the fine print on these here is another story on someone getting hit with a ton of interest on  12 months no interest deals from a home improvement store.   

Home Depot 5

A year ago, we made the decision to renovate our kitchen..
We ordered cabinets, counter tops, and a new fridge from the national home improvement store 

They were running a special where you could get 12 months, zero interest.
I was expecting a large bonus at work later in the year, that would cover the rest of the costs (over $10,000), 
.. which would insure that we didn't get caught paying interest.  (mistake number 1 don't count your eggs before they hatch) 

Of course, things happen.. and my company cancelled their bonus program last year (blaming the economy).
Without the bonus, we were able to pay down only about $2,000 of the $10,000 due.
I sorta hoped and prayed that something would happen that would enable us to come up with the rest, but we just didn't even get close. (Don't ever count on work bonuses in advance to pay down something your already bought) 

A few weeks ago, I got a bill from the creditor letting me know that a $2500 interest charge had just been applied to my account.
$2500!!.. Just a painful blow.. And after calling the company and seeing if there is anything they could do to help me.. They pretty much laughed me off the phone.(They are doing the happy dance when this happens they are not giving me the 0% interest loans from the goodness of your heart) 

In retrospect, if there was ever a time to play the balance transfer game, this should have been it. 
I should have transferred the remaining $8000 to a credit card, where I would at least avoid the back interest.. (this is an option but usually credit card balance transfers have fees of 3-5% to do the transfer) 

Bottom line unless you know for sure (ie have the money in the bank or can make a monthly payment that will pay if off in time) do not do these deals they will come back to hurt you. 

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