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The Ugly Truth About No-Interest No-Payments Offers

Have you ever wondered how retailers can possibly afford to offer the no-interest, no-payments, no money down kind of deals you see advertised? That was the subject of a question I received recently.

Woman with hand to her chin wondering about no-interest no-payments retail offers

Dear Mary: There are several appliances, electronics, and furniture stores in our area that run television commercials offering nothing down, no-interest, no-payments until 2022. It sounds like I can just walk in and take what I want and not pay for three years! How do these companies really make money? Kate

Dear Kate: First, these offers are on approved credit and come with a lot of other fine print. You need pristine credit to qualify for those attractive terms.

Good luck qualifying

One retailer told me only about 25% of the people who apply for these amazing no-interest no-payments offers,  designed only to get buyers through the door, can actually qualify. The other 75% are offered some other deal with horrible terms. People often accept these terms because, by the time they fill out the paperwork, they’re so emotionally involved and have their hearts set on that “free” absolutely awesome deal, they’re anxious to sign anything.

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