1 Year Same As Cash Scheme

So I wanted to give you a heads up on something that is a real issue with a lot of people. Have you ever heard of or participated in one of those “1 year Same as Cash deals?” I have a buddy who bought some furniture last year using that payment plan, but when the time came to pay up, he couldn’t quite swing it. No big deal right? You just start making payments and everything is ok. Well, not so fast. Not only did he have to start making payments at 22% interest, they tacked on all the back interest for the WHOLE year onto his account. So what should have ended up being a $2200 balance, actually cost him $2800. Ouch. Now I hear you saying “That would never happen to me,” but did you know that this happens 86% of the time? You heard me right, 86% of people can’t make their payment within 1 year and so they end up with a high interest rate and a really big balance. So here’s the deal. Unless you’ve got that money stashed away somewhere, or you put some money aside each month to pay for your purchase, the one year “same as cash” deal might not be such a good idea. Many times, flashing cash from the get go, will get you a better deal and save you a lot of money in the long run. In any case, if you find yourself tempted to go this route just be careful. First, be honest with yourself and your financial situation. Remember, 86% of people thought they could make that payment when the year was up, but they couldn’t. Second, try to negotiate a better deal by paying cash up front. A lot of companies are strapped right now and cash is king. Third, if you decide to take this route, mark you calendar at month eleven, and then make your payment then. It would be better to pay one month early than to accrue back interest and a larger balance.