Save a Buck: Interest-Free Not So Free - AARP Bulletin

Interest-Free Not So Free

Buy a $2,000 TV on credit and don’t pay interest for a year! Purchase a refrigerator, interest-free for three years! Such offers may sound tempting but if you’re not careful, you could lose a lot of money. If you miss a monthly payment (often 1 percent of the balance), pay it late—by even a few hours—or fail to pay the balance by the deadline, you could be charged the entire interest retroactively from the date of purchase. And interest rates on these deals are high—“19.8 percent, sometimes higher,” says Gerri Detweiler, credit adviser at . An interest-free deal is good “for someone who is disciplined and has good credit. It can allow you to keep your own money in the bank and benefit from the float. But the traps are numerous,” she says, which means your $2,000 TV that came with a year of interest-free credit could end up costing $2,400 or more. Caroline E. Mayer is a consumer reporter and lives in Arlington, Va. Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures

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