Advantages Why pay interest when you don't have to
Disadvantages Junk mail will follow
Some Years ago we decided we needed a new sofa, 2 to be precise. We shopped around & the best one we found was at Jessops (known as John Lewis). Unfortunately at the time our cash was tight & we could not afford £1000 up front.We happened upon DFS, you know the store on TV that always has a sale that must end on Sunday. Well they had some sofas that were returned unwanted by a previous customer & were on sale for £1000.
We enquired about how to pay - there were 2 options. Pay cash now, or buy now pay later over 3 years Interest Free!!!.We elected to defer starting payments for 6 months, but you can elect upto 12 months & we paid the loan over 2.5 years. At a cost of about £30 per month we paid the £1000.
Now if we had paid in one go, the loss of interest to us by taking £1000 from a typical savings account that offers say 4% interest would be £120 over the 3 years we elected for. If you went for the full 4 years of the loan it would be £160 loss of interest - that's more than 15% of the initial £1000 to buy the sofasI am a avid user of interest free loans they provide the less well of with nice things at cash price over a number of months or years.
So if you are going to buy a sofa i recommend DFS, or another outlet that allows interest free options.
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