buying furniture and paying for it over 18 months

[Anonymous]

We are moving, and I am seeing deals now for Memorial Day sales, 30% off and no financing for 18 months. We have the cash for some new pieces, but we also have a bit of work to do on the house, so I'd rather not use all of our savings. What is the downside to paying off new furniture without interest over 18 months? I've never financed anything in my life except for a house and a car (and paid that off within the year), so the idea of not saving for it and buying it now, and paying it off over the next 18 months, is foreign to me. I can't see the downside, however, since there's no interest charged?

[Anonymous]

no downside to 0% interest.

but if you couldn't buy it with cash today, then you
shouldn't be buying it at all.

it's ok to wait to furnish your house a little at a time. you don't yet know what projects you will have to do in the new house.

[Anonymous]

I did this for replacement windows in my house, not for furniture. It was a good deal for me because I didn't have to pay $7k up front - I was able to spread the payments out over the 18 months or whatever and didn't have to deplete my savings (and interest earned) or reduce debt repayment, etc. The windows are a long-term investment in my house and I'm very pleased with them, so I think I made the right decision.

[Anonymous]

To me as long as you have beds and basics, you don't finance if you cannot afford it or buy cheaper. It makes no sense to finance.

[Anonymous]

Be sure to read the fine print. I've heard (never experienced first hand) that the details and due dates are important. If you miss one payment, they make you pay interest on the entire purchase. And something is tricky with the last payment...I don't remember the details but basically I was told you pay it all off a month or two early so that you don't risk missing the last payment and incurring interest on the full purchase.

[Anonymous]

You can get the furniture cheaper if you offer cash

[Anonymous]

The only downside is if something should happen and you can't pay it off within 18 months - usually there's a hefty interest (that might retroactively apply to day 1!). So that's the get - there will be a percentage of people who end up paying significantly more.

It's also possible there are deeper discounts at other times, and you're paying 'hidden interest' by paying slightly more.

I disagree a bit with the poster who said if you can't pay it in cash now, don't buy it. 18 months is along time. i'd say if you have half now, and a reasonable plan to cover emergencies and also regular payments, then go for it. It's a bit of instant gratification, but if you're smart and strategic with money and capable of making regular payments without falling behind, it's interest free money.

[Anonymous]

Anonymous wrote:The only downside is if something should happen and you can't pay it off within 18 months - usually there's a hefty interest (that might retroactively apply to day 1!). So that's the get - there will be a percentage of people who end up paying significantly more.

It's also possible there are deeper discounts at other times, and you're paying 'hidden interest' by paying slightly more.

I disagree a bit with the poster who said if you can't pay it in cash now, don't buy it. 18 months is along time. i'd say if you have half now, and a reasonable plan to cover emergencies and also regular payments, then go for it. It's a bit of instant gratification, but if you're smart and strategic with money and capable of making regular payments without falling behind, it's interest free money.

OP here. We do have savings and college and emergency and retirement - all that stuff. It is totally instant gratification - and also knowing that my ability to get stuff done is highest right when we first move in because life starts happening once we are in there, and I start getting lazy and not decorating any longer. But good points about the hidden interest - I'm going to check that out.

But you others are right - if we don't have it now, we should probably just save for it.

[Anonymous]

I haven't paid interest on cars or furniture the past 20 years, no issues for me as I always pay them off well in advance to not incur any compounded deferred interest....

[Anonymous]

Anonymous wrote:Be sure to read the fine print. I've heard (never experienced first hand) that the details and due dates are important. If you miss one payment, they make you pay interest on the entire purchase. And something is tricky with the last payment...I don't remember the details but basically I was told you pay it all off a month or two early so that you don't risk missing the last payment and incurring interest on the full purchase.

This is the downside!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Be sure to read the fine print. I've heard (never experienced first hand) that the details and due dates are important. If you miss one payment, they make you pay interest on the entire purchase. And something is tricky with the last payment...I don't remember the details but basically I was told you pay it all off a month or two early so that you don't risk missing the last payment and incurring interest on the full purchase.

This is the downside!

+1

I have taken advantage of this kind of loan for a few things and I've never had a problem, but see if you can set up an automatic payment through your bank account to ensure you are never late for a payment because they will get you if that happens.

[Anonymous]

If you know you can afford it (and even if you have the money saved) it's good to finance it if it's at 0%.

We did this for a car--basically, we'd been saving for a while and had 2/3 of it saved. They offered us 0% interest for 36 months and the price wasn't changing if we paid more up front. So we put half the savings in a 2 year CD and half in a 1 year CD. We used what we'd been putting in savings each month plus a little bit extra to pay for the first month. The interest we got wasn't huge--basically enough to cover an oil change and a tank of gas per year--but it wasn't hard to set up, and why not get those things free?

[Anonymous]

Do not finance furniture. Just pay cash or wait on it. I've done it before and it is just super tedious and annoying to still be paying for furniture when you are already looking forward to the next new purchase for your home. Just pay cash or wait. REALLY.

[Anonymous]

I think the downside is buying all your furniture at once from one store results in a mediocre looking home. The more interestingly decorated places are built slowly over time from a range of places, and a combination of new and vintage furniture (or all vintage furniture, if well selected).