February 12, 2024
Question:
I recently received an offer from my credit card allowing me to divide up a large purchase into monthly payments with no fee or interest charges. Is this a good idea?
Answer:
If your monthly budget can absorb the purchase without impacting necessary expenses, I would say pay it in full and forget about it.
On the other hand, if paying for the large purchase would cause you to have to skimp in other areas, dip into your emergency fund or longer-term savings/investments, I would cautiously say you should take advantage of the offer with a couple of caveats.
Choose the shortest payoff period you can. Credit Cards will typically offer a 12-month plan or shorter ones like 6 or 3 months.
Just be careful, credit card firms use this no fee offer to get you to try the service (which usually charges a monthly fee).
If you can, it’s always a good idea to pay off your credit card every month. If from time to time you can’t, these no fee offers can be useful.
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