CUSTOMERS eyeing a new couch or TV but without the cash to buy are often attracted by no-deposit, no-interest deals.   :-?

However, failing to understand the fees and traps can be an expensive exercise.

Almost one-third of consumers who have signed up to these deals in the past five years have been stung with interest, research by national consumer group Choice has found.   :(

Choice spokeswoman Ingrid Just says while the deals seem appealing, they can prove costly.

"The key thing for consumers to remember is they can cost you hundreds of dollars in fees alone, even if you pay everything off within the interest-free period," she said.

"They are pretty attractive offers where you have flashing lights saying 'buy now, pay later'. You have to look at some of the fees and commitments when you sign up."

Research by Choice also found a no-deposit, four-years-to-pay offer that charged $220 in fees and also charged 26 per cent interest from day one.

GE Creditline is one of the most commonly used interest-free credit cards and is used in more than 10,000 stores nationally. Other key providers include David Jones's American Express store card and HSBC.

Make sure you find out what the card's interest rate is - they are often more than 20 per cent.   :(

Canstar research manager Chris Groth says consumers should make the most of interest-free purchases, but should make sure they work for them.

"You can definitely use them to your advantage and they are genuine, so there is an interest-free component for a certain period," he says.

"But make sure you know when the interest-free period finishes and know what the revert rate is once it ticks over.

"You may need to make scheduled payments during the interest-free period.

"My recommendation is to use it but don't let them use you, pay it off within the interest-free period and you'll be a happy camper."

Groth says fees, such as administration of the account, often apply and can add up as the months pass by.   :(

"Also look at whether there is any ongoing or upfront fees associated with this," he says.

"Know what the conditions are around these things: Are you penalised if you make no repayments, are you penalised if you pay it off within two weeks instead of six months? It's really about clearly knowing what the terms and conditions are."   ;)

Read more: http://www.news.com.au/money/cost-of-living/take-an-interest-in-consumer-deals/story-fnagkbpv-1226282464779#ixzz1nc8tqotq

I recall hearing that the ones that are "interest free" attract an exorbitant amount of interest if you make just one monthly payment late - even if it's just a day late.

Yes Frances, I think a lot of people, don't know what they are getting themselves into unfortunately.   :(   

Well, no different to any other form of credit is it??

You can definitely use them to your advantage and they are genuine, so there is an interest-free component for a certain period," he says.

"But make sure you know when the interest-free period finishes and know what the revert rate is once it ticks over.

"You may need to make scheduled payments during the interest-free period.

I really struggle with the concept of feeling sorry for people who either take out loans/run up credit debt - then complain they can't afford to pay it back.

I have NEVER had balances sitting on my credit cards and yet have got first class flights on Qantas where I have used them so much.

It's really all about budgeting.

Seriously, what is the problem????
Are people this thick???

Frances wrote on Feb 28^th, 2012 at 6:52am:

I recall hearing that the ones that are "interest free" attract an exorbitant amount of interest if you make just one monthly payment late - even if it's just a day late.

and that point is guaranteed to be buried in small print in gobbly gook in the contract. Why isn't it displayed in BIG LETTERS in the store so all can see ??

Andrei.Hicks wrote on Feb 28^th, 2012 at 8:43am:

I really struggle with the concept of feeling sorry for people who either take out loans/run up credit debt - then complain they can't afford to pay it back. I have NEVER had balances sitting on my credit cards and yet have got first class flights on Qantas where I have used them so much. It's really all about budgeting. Seriously, what is the problem???? Are people this thick???

They wouldn't make a profit unless they could stitch people up to these loans. Why are you so thick ?

I heard Australia tried to get a TV on one of them loans but was in too much debt and it got turned away.

Now how will we watch all this political madness unfold.