What is the difference between interest and a finance charge?
sehuds2 asked:
I was looking at purchasing an item that I need to have financed, and one of the promos is no interest for 12 months, but Im wondering is interest different from the monthly finance charge? It says minimum finance charge of $1, so what is the difference between a finance charge and interest
I was looking at purchasing an item that I need to have financed, and one of the promos is no interest for 12 months, but Im wondering is interest different from the monthly finance charge? It says minimum finance charge of $1, so what is the difference between a finance charge and interest
Tags: 12 Months, Minimum Finance Charge, Promos
October 4th, 2009 at 2:44 pm
They’re basically the same thing. The finance charge is the amount of interest you’re charged for any given month or year. If you have 0% interest, you should have 0 for a finance charge. The minimum finance charge of $1 sometimes only applies if you carry a balance that doesn’t have the 0% interest. The only way you can confirm that is by looking at the ‘fine print’ to verify…or by writing or calling the company you’re looking to do business with. 0% interest rocks, but be very aware that sometimes interest will still accrue during the promotional period. Meaning that if you don’t pay off the entire item within the 12 month period, you’d still owe interest for the whole year anyway (even though you got 0% at the time….). So be sure to pay it off in the 12 month period. But again, read the fine print or contact them.
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