90 Days Same as Cash – A Deal Too Good to Be True?
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How often have you walked into a store only to window shop but buy something you don’t need? Well, you are not alone. Many of us step into furniture stores and supermarkets to look at appliances, beautiful blue couches, and classic coffee tables. It doesn’t hurt to scout, right? But right then, you come across an offer you can’t resist.
The salesman introduces a financing offer known as 90 days same as cash, which sounds interesting to you. This offer allows you to take home your favorite piece of furniture or an appliance without paying anything right now, and on top of that, you have 90 days to make the payment. Interesting, isn’t it?
It might be hard to resist such specials, but it can put you in deep financial trouble if you aren't careful. Let’s understand what 90 days same as cash is and how it works.
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What are 90 days same as cash?
All of us have come across online shopping websites and furniture stores offering financing options known as 90 days same as cash. The store makes you feel like you are beating the system and enjoying a free loan for 90 days while getting the goods you want. This cash offer is interest-free, and you do not have to make any payment until a later date. You might find the deal lucrative, but it is not as simple as it looks.
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How does it work?
With 90 days same as cash, the store will guarantee you no interest payments for 90 days. This would also be the case if you had purchased an item in full cash. However, you could pay huge interest if you cannot make the payment in 90 days. It has a deferred-interest financing arrangement which works only in your favor if you can make the payment in 90 days. If you default on your payment, the interest will apply to the entire amount.
Risks of same as cash
Before you jump into the idea of 90 days same as cash, it is important to understand the risks of the program. It is a deferred interest finance offer which means the interest will be applicable from the date of purchase if you fail to make the payment in time.
If you purchase an item for $3,000 and can only manage to pay $1,000 in 90 days, you will pay interest on the entire $3,000 at the end of the period and not on the balance of $2,000. The interest, in this case, is backdated to the date of purchase and will then be added to the balance.
In a perfect world, you would be able to finance the purchase and pay off the amount without paying any interest, but it is not how it always works. You might assume that you can afford to pay off the balance, but something could come up and put your finances off track. The retailer is aware of this, which is why they are keen on offering this deal. Sometimes, the interest rate can go as high as 24 and 36 percent!
Almost 80% of the people who opt for such deals do not manage to pay off the balance in full by the end of the 90 days. Even if you are very responsible, life might throw little emergencies at you, pushing you in a different direction. You could also be a part of the 20% of the people that paid off the balance and managed to pay in full, but if you had saved up for the purchase, you’d never have to worry about the interest in the first place.
The deal can also go sour if you are late on a payment. Some programs immediately void the special even if there is a delay of one day and you could face finance charges.
Alternatives to 90 days same as cash
If you think you cannot afford to pay for a purchase in full, you might also have trouble financing it. In such circumstances, saving up for large purchases is best, so you do not get into financial trouble. Use the 90 days to save up for the purchase and then head to the store. It will develop strong saving habits, and you will also find that you do not want the items as much as you initially thought.
Another alternative is putting the purchase on a debit or credit card. It will work much better than the financing deal. If you qualify for a credit card that has a 0% introductory rate on the purchase, you will have enough time to pay off the balance, and even if you are unable to make the payment, the interest will only be applicable at the end of the promotional period. That said, the interest is not backdated as it is with 90 days same as cash financing.
You can consider this alternative if you want to keep control of your finances and are stuck without any appliances or furniture. Buy a used appliance that can do the job in the interim. Decide if you can do without the item for the present moment, and if you must have the item, head to the second-hand store and look for used products, you might find a good deal here.
When making a big purchase, you can consider applying for a personal loan that offers low interest. However, your credit score will play a crucial role here.
Use Quicken Loans to Get a Personal Loan
- If you're tight on cash right now, you may want to consider getting a personal loan. A personal loan is a loan that you can use for just about any purpose like: paying off other debt, renovating your home, or family needs like a wedding or adoption.
- TrustPilot Rating 4.6 out of 5
- Connect with lenders for $0
- 100% online experience.
Who should opt for 90 days same as cash
If you have set aside funds for your purchase and are 100% certain that you will be able to pay off the amount in 90 days, you might want to consider the deal. That said, even if you have 70% of the amount and have consistent cash flow, you might be able to make the payment in time. In that case, it could be a good alternative for you.
Who shouldn’t go for 90 days same as cash
If you lack financial discipline and often find yourself making impulsive purchase decisions, 90 days same as cash is not suitable for you. It could put you in deep trouble and massive debt. If you think you can pay off the money within 90 days, look at your finances and then decide. It might not be a good choice.
Pros and cons
Pros
- Own products without paying a lump sum. If you have a strong hold on your finances, same as cash can work out in your favor. It will allow you to own appliances or furniture without paying an upfront amount.
- Helps plan purchases. Through the same as cash financing offer, you can plan your purchases well in advance while keeping a tab on your finances.
Cons
- High interest. The same as cash has high-interest rates, and if you fail to make the payment within the given tenure, it could go as high as 36 percent! This could put you in a pile of debt.
- It can be burdensome. Paying the amount within the given period is crucial; if you can’t, it will become a debt burden. The interest will continue adding up, and the amount will turn huge in no time.
- Disrupts finances. You could go off track if you do not keep a tab on the finances. When you purchase, you do not know that an emergency might pop up and could put your finances off track. It will disrupt your budget if something goes wrong and you cannot make the payment on time.
FAQs
Is same as cash interest-free?
Any same as cash offer is an interest deferred offer and is not interest-free. It is so called because it is what the offer does. If there is no interest for 60 or 90 days, then it does not mean that no interest will be accrued, but you are not paying any interest yet. Once the interest is accrued, it will be back-dated and applicable from day 1. The promotional period will vary by the lender and the program.
Will my credit score be checked for the same as cash offer?
No, your credit score will not be checked when you avail of the offer. There is no credit check and no credit score requirement.
Can I be eligible for 90 days same as cash with bad credit?
Yes, even with bad credit, you can be eligible for the payment plan.
Use Quicken Loans to Get a Personal Loan
- If you're tight on cash right now, you may want to consider getting a personal loan. A personal loan is a loan that you can use for just about any purpose like: paying off other debt, renovating your home, or family needs like a wedding or adoption.
- TrustPilot Rating 4.6 out of 5
- Connect with lenders for $0
- 100% online experience.
The bottom line
Several companies offer this deal to encourage you to make a purchase you would otherwise avoid. They know that not everyone will be able to pay off the balance and will owe interest, which can work as an additional income. So, if you are interested in buying a product but do not have the cash, start saving for it. With deals like 90 days same as cash, you could fall down a rabbit hole of interest in the short term.
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Writer
Vandita Jadeja is a financial writer and editorial assistant at Joywallet. She loves to read and write about money and brings 7 years of experience from the financial industry. She loves coffee, mountains and sunsets.
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