The Perils of 90 Days Same as Cash

You’ve heard the promos. Buy now, pay nothing until January 2008. No payments. No interest. Great deal, right? Let’s find out.

I know I can pay for my item before the interest hits, so this is a good deal. If you can pay before the interest hits, why don’t you just save the money and buy it in 90 days? What happens if you unexpectedly lose your job or have a major health crisis in that 90 day time frame? Life is unpredictable. Never assume that you will be able to pay something off in 90 days if you can’t pay for it today.

I think I can pay this off in 90 days, but if I can’t, I’ll just pay interest for a couple of months. It will be OK. You don’t “just pay interest” for a couple of months. When you buy something on a 90 days same as cash plan, if you don’t pay it off completely in 90 days, all of the interest that accumulates in that 90 days time frame is added to your balance. Interest starts accruing the day you take the item home. There is no grace period. If you don’t pay, be prepared for a large interest charge.

How much could the interest possibly be? Isn’t the going rate around 12% these days? On the contrary. For a 90 days same as cash promotion, it isn’t unusual to see an interest rate upwards of 22%. That’s an awful lot of interest!

Isn’t it great the the store wants to make it easy for me to afford nice things? A better question to ask would be “What does the store get out of this deal?” The store managers know that most people will not pay their bills in full within the 90 day promotional period. So this deal is actually very lucrative for the business. Always remember, if the business isn’t making money on the deal, they wouldn’t be offering the promotion.

What can you learn from all this? If a deal seems too good to be true, it probably is. It’s always better to save your money and pay cash upfront than to take a 90 days same as cash loan. Why take the risk?


By , on Sep 26, 2007
Lynnae McCoy I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.


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  1. Oh but I loooove 90 days SAC. And I loooove 12 months same as cash even better… Dell computers are you calling my name…. I really want a laptop….


  2. I think that its ok if you only have the cash to pay it already and you are disciplined enough to remember to pay it off in time. For any given purchase I was actually making, I’d have the former but not the latter, so I don’t do it.

  3. boomeyers:

    Very good points! I think the only way we bought before was the no interest or payments for a year and we paid it off in plenty of time. So true (for us impatient types, moi!) Save the money up for 90 days and buy it. Another sale will come along, you won’t miss the boat, just that particular boat.

  4. Lynnae:

    Heidi, I think that is acceptable, but I think you’re one of the few people who actually do it the right way.

    Angie, believe me….I have learned many lessons the hard way, too.

  5. Angie:

    I was burned by this once, but never again. Tough lesson learned, but maybe that is what it takes for me

  6. We use free financing sometimes, but only when we have the money to pay in cash first, and then we just collect the interest during the period.

    But otherwise, you do make a very good point about these. Not very many people adequately understand interest rates and charges etc.

  7. Lynnae:

    I’ve used 90 days SAC before too. Fortunately we got it paid off in time. I didn’t know how the interest worked until after we had taken the loan, and I was pretty stressed about paying it on time. Never again.

  8. Wish I could say I’ve never done this, but…

    Great perspective…remember nothing is free

  9. I used to use 90 days SAC for appliances & furniture, until I read the fine print, and found they were charging like a $50 fee (tacked onto the price) for the service. It was “interest free” but there was a surcharge for using the SAC option! Never again!

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