Are you looking to make a major purchase and don't want to pay for 6 months, 12 months or even longer? There are thousands of such programs available. They are often called "90 days same as cash" or "1 year same as cash" or "buy now pay later". Let's take a quick look at how these types of programs work and whether or not they make good financial sense.
If you are about to make a major purchase such as a home appliance or electronic gadget you will definitely be presented the opportunity to buy the item now and pay later. Sounds great, right? Not so fast, these deals don't come without strings attached and if you're not careful it can end up costing you hundreds or even thousands of dollars in finance charges. When you agree to a buy no pay later deal you are immediately given a credit application. This credit application is necessary because you are essentially being approved for a credit card or a loan in the amount of the purchase you are making. If approved the lender pays the store and you owe the balance to the lender. You will make no payments and accrue no interest until a certain date in the future. In the example of a 1 year same as cash deal you will make no payments and accrue not interest for a period of year after the date of purchase.
Now, here's the tricky part - Once you reach that anniversary date you will begin accruing interest each day at a very high rate. The interest rates on these types of deals vary but are usually about what you would pay on a credit card cash advance (in other words - really high). If you do not pay off the balance in full buy the anniversary date you immediately begin getting hit with finance charges that are being accrued at a high interest rate and add up VERY quickly. The lenders in these types of transactions are betting on the fact that a large percentage of consumers will have every intention of paying off the debt prior to the anniversary date but ultimately will not do it. This is how they make big money on these types of deals. If you are very disciplined and organized with your finances you can take this type of deal, pay off the balance before the anniversary date and pay no interest whatsoever. If you are this type of person then a buy now pay later deal can be a terrific what to make a major purchase.
Can you get a buy now pay later deal without having your credit checked? The quick and easy answer to this question is no. As mentioned earlier, these types of transaction are loans and anytime you get a loan the lender will need to see how risky of a borrower you are. The only way they can do this is by checking your credit report.
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