Gotchas from zero percent financing offers

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Q. My computer died and I need to buy a new one. I don’t have the money so I can use a credit card or take a financing deal with zero interest for one year at the store. I’ve heard those deals have gotchas, though. What should I do?
— Shopper

A. You should proceed with caution.

Zero percent interest financing offers can be good deals, but you should be mindful of several caveats.

First, be sure to read the fine print of the contract, said Sheri Iannetta Cupo, a certified financial planner with SageBroadview Financial Planning in Morristown.

Cupo said if you’re uncertain about how to interpret any of the terms, call customer service for clarification and document the conversation.

Next, check and double check the exact date when the zero percent interest-free period or grace period ends.

“It may not line up with a statement due date so to avoid interest charges, you may need to pay the balance before the statement due date,” Cupo said. “To give yourself more wiggle room, plan to pay the balance off two months before the end of the grace period — do not wait until the last month.”

And, she said, be sure to pay the entire balance and don’t be even a few dollars short.

Then, Cupo said, understand if there is anything that may trigger the loss of the grace period.

Also understand how the offer affects your credit.

“The merchant will check your credit before issuing the offer and too many inquiries can negatively affect your credit score,” she said.

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This post was first published in August 2016. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.