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Are Same as Cash Offers a Good Deal?

Youق€™ve likely seen advertisements that offer ق€œsame as cashق€ sales ranging from 30 days to 18 months. This type of financing allows you to purchase something on credit without paying interest as long as you pay it off within the allocated time. This type of deal can be quite useful if you ensure you pay off the debt within the time frame. However, if you want to purchase something bad enough it can be easy to overestimate your ability to meet the ق€œsame as cashق€ terms, which can be quite costly. Thereق€™s no denying that these offers are extremely popular and generate a lot of sales, that being said are “same as cash” offers ever a good deal?

Why ق€œSame as Cashق€ Sales Are Usually aآ Bad Deal

You may think that you canق€™t go wrong with ق€œsame as cashق€ sales and itق€™d be stupid not to purchase an item using it. However, be warned that if you donق€™t pay off your debt within the given time frame, youق€™ll be subject to a massive debt when the bill comes around. One study found that close to 90 percent of people who purchase an item using a ق€œsame as cashق€ offer wasnق€™t able to pay off the debt on time to avoid paying interest. Once the interest is tacked on, those people are subject to a much larger bill than they originally thought theyق€™d end up paying.

What Happens if You Donق€™t Pay Off the Debt on Time

You may think that itق€™s okay to not pay off your balance in the allotted time and that youق€™ll just pay down the debt as much as possible and then deal with the interest afterwards. The issue is that ق€œsame as cashق€ financing is a kind of deferred interest arrangement that only is beneficial as long as you pay the balance off in full within the given time frame. If the interest isnق€™t paid in full, then the interest will be backdated all the way back to when you first added the purchase to your balance. This means you only get interest-free days as long as you pay off the balance entirely in the given time frame. Otherwise, you lose your interest-free benefit entirely.

Saving is a Better Option

If you arenق€™t able to pay off your purchase in full when you buy it, then you likely shouldnق€™t finance it, even if itق€™s with one of your lower interest rate credit cards. Your best option is to save for large purchases so that you donق€™t need to stress about paying it off at a later date. In fact, some financial experts argue that youق€™re better off making a purchase on a credit card without the 90-day financial deal, especially if you put it on a credit card that has a 0 percent intro rate. This will give you at the minimum six months to pay down the balance even if interest starts to accumulate later on. This is because it isnق€™t backdated to date that you purchased the item like it is with a ق€œsame as cashق€ financing option.

When a ق€œSame as Cashق€ Financing Option Makes Sense

If you are an extremely disciplined spender, using a ق€œsame as cashق€ financing option can be a beneficial solution in the case that you need an item and donق€™t have the finances to pay for it at the moment. If you are able to pay the item off within the given time frame, there really is no harm in the ق€œsame as cashق€ option as youق€™ll pay zero interest. However, keep in mind that it is often the case that retailers increase the price of items slightly in order to make a bigger profit in the case that you do meet their terms.