Interest Free Credit. What is the point?

[Emmie92]

If you have the cash it's better to pay for the item on a credit card and then pay the balance with your cash. Then you have two people to chase if it breaks. I've claimed from Visa for something previously and it was really easy. I also copied Visa into a claim I made against a holiday company, they helped me take the holiday company to small claims.

 

That is what I do. It acts has a second guarantee.

[Dingus]

So long as there is effectively no flexibility on price/taking an agreement per the OP, and you want the item and none other, and are happy with the asking price, then 0% is great.

 

Put your ready-cash in an interest-generating account, set a DD on that account to pay off the monthly amount, get some interest from your ready cash over the term of the agreement, and forget about it (and the ins and outs of the why/how/etc.).

 

Done this plenty of times with IKEA, M&S, etc. ourselves, without any hassle whatsoever.

 

Do this often enough on the same '0% account' (basically, anytime you need to buy a big-ticket item, and the opportunity of 0% is there for the right item at the right price) and it soon accumulates nicely.

 

What's the problem?

 

 

There's a very real problem. Everytime you apply for credit or have someone making a credit check on you it affects your credit rating. So getting saddled with credit agreements you neither want nor need can disadvantage you if you should every genuinely require credit. The most credit worthy folks are the ones who don't borrow.

[Stranza]

There's a very real problem. Everytime you apply for credit or have someone making a credit check on you it affects your credit rating. So getting saddled with credit agreements you neither want nor need can disadvantage you if you should every genuinely require credit. The most credit worthy folks are the ones who don't borrow.

 

Not really true. Ethically the most credit worthy folks are the one's who save but you need to have something to base a credit score on, if you never ever have credit then how do they know you can manage credit? They like to see some basic credit arrangements on your report and that you manage them properly. Too many and it swings the other way.

[truman]

. The most credit worthy folks are the ones who don't borrow.

 

I'd have thought the most credit worthy were those that have borrowed and paid back without any problems...if you've never borrowed you have no credit history..how do the companies know whether or not you're a good risk if you've never used credit..? Genuine question..

[splodgeyAl]

Probly considered off-topic, but bear in mind that Ford make more money from credit than they do from cars, and that might help explain why companies do this

[Chris_Sleeps]

Everytime you apply for credit or have someone making a credit check on you it affects your credit rating. So getting saddled with credit agreements you neither want nor need can disadvantage you if you should every genuinely require credit

That isn't automatically a negative. How does borrowing money and paying it back in a way that profits you (as L00b has mentioned) disadvantage you?

 

The only disadvantage is in borrowing money and not paying it back.

 

There is the moral point aswell in the OP that not wanting to borrow money, not wanting to get in debt, means she would've been charged more money for a product. It is a backwards system that punishes people for saving up for something.

[L00b]

There's a very real problem. Everytime you apply for credit or have someone making a credit check on you it affects your credit rating. So getting saddled with credit agreements you neither want nor need can disadvantage you if you should every genuinely require credit. The most credit worthy folks are the ones who don't borrow.

You are very off wide off the mark here. Have you ever borrowed money at all?

 

I have been refused credit twice in my life, only ever in this country.

 

Both times, it is because I did not have "enough past agreements" (like the OP, I preferred to pay cash and not owe anything to anyone). I'm sure I posted about this before on here - couldn't believe it at the time since, logically, with a whiter-than-white record and all the docs/bills/loud payslips etc. the lender wanted to see, I should have just waltzed through the approval procedure.

 

The most credit worthy folks (in the lenders' current assessment paradigm) are not the ones who don't borrow - they're the ones who have a history of borrowing and repaying on time/as required. Don't take my word for it - go ask a banker.

[Stranza]

YTou;re very off wide off the mark here. I have been refused credit twice in my life in this country. Both times, it is because I did not have "enough past agreements" (like the OP, I preferred to pay cash and not owe anything to anyone).

 

My close friend has a very tight hubby who saves all his cash. Even though he had cash on him they wouldn't sell him an iphone in Meadowhall apple he had to borrow my card and give me cash, he was furious for weeks

[Magilla]

Last week we went to buy a new 3 piece suite. Everywhere seemed to be offering 4 years interest free credit. But what does that mean?

 

It means that they hope you forget to pay up on the designated day 4 years later, with no reminder, so you fall foul of the small print.

 

Essentially, it's a bit like a scam on the forgetful.

[Chris_Sleeps]

Is there anything to stop you paying it in full a week after it arrives?