Is “Same as Cash” a Good Idea?

I remember when I put new cabinets in my house.  It was time because those cabinets were screaming to go back to the 70’s where they came from.  Old and tired, repainted so many times that much like some females I know, have no idea what their natural color was.  Have you ever priced cabinets?  I hadn’t either so I was shocked that one 8 foot wall of cabinets was going to set me back $5,000!  What are these things made of?


This article isn’t about my home improvement woes, it’s about the exciting thing I learned at the home improvement store that day.  Years ago I found out that they are happy to let me use their money for 12 months free of charge.  No interest, no nothing!  You may have heard of it.  It’s often advertised with the words, “Same as cash.”


It’s often as simple as applying for a store credit card.  When you’re making a high dollar purchase, ask the associate about this.  Often it’s there but if you don’t ask, you won’t get it.  Also, sometimes it’s advertised as 90 days but again, if you ask, you can often get that extended.


Why is this a good deal?  What could I do with $5,000 if allowed to invest it for 12 months?  There are so many possibilities but the point is that $5,000 invested wisely for 12 months could pay for a significant portion of my cabinets.


I don’t want to burst your bubble by being blunt but I have to:  You have to diagnose yourself and if you aren’t the utmost is financially disciplined, this isn’t for you.  If you have credit card debt or you do not pay your cards in full at the end of the month, you are to stay far away from offers like this.  There is a big reason for this.


Let’s say that I got my 12 months same as cash on my $5,000 cabinets.  Here came the 12 months and I paid my cabinets off 1 day late.  My $5,000 bill becomes nearly $6,100!  How did this happen?  It happened because I was one day late and when that happens, the contract says that all of the interest from the day I bought the cabinets is charged to me.  Often the rate is 21.6%.  This is why this type of promotion is only for the financially savvy.


What happens if you are coming close to the payoff date and you don’t have the money?  Get a cash advance from your credit card, borrow from your 401K, do anything!  Almost anything will be better than paying all of the interest.


The bottom line is that you can take advantage of this great offer only if you are disciplined enough to pay it off.

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