0% Financing - Not Just for Cars

Almost every U.S. automaker offers 0% financing, but did you know that 0% financing also is available for furniture, electronics, and appliances?

Before you rush out and buy a new bedroom set, hold on. Those great offers aren't always as great as they seem.

One big problem with these offers is that they often lead consumers to impulse buy or spend more than they can afford. You hear this 0% financing offer and think it sounds great. But stop and ask yourself, "Was I planning on purchasing this item before I heard about this? Can I afford this item?"

If you really want the item, ask the retailer what its terms are. Many people accept offers without being aware of the consequences.

For example, keep in mind that just because you get 0% financing for, say, 12 months, doesn't mean you don't have to pay. If you don't pay off the item before those 12 months are up you're going to face some hefty interest charges.

Let's say you buy a $600 couch with a 12-month, 0% financing offer. As part of the terms of your contract, if you haven't fully paid for the couch by the due date, a 20% annual percentage rate (APR) will accrue from the date of purchase. So if you haven't completely paid for that couch after 12 months, you'll owe an additional $120--no matter how much money you have left to pay. And the cost of that couch rises to $720.

Even if you know the terms and plan to pay the entire balance before the specified date, stop and think. A lot of things can happen in a year. There is no way for you to know what financial obstacles you are going to run into.

If you really need an item, and you can't afford the entire thing right now, stop by American First and see what kind of financing it can offer. You'll often find a better deal there.

Copyright 2008 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.