1 Year Interest Free: What You Should Know

Most large chains such as Lowes and Sears often offer a special on purchases of appliances or other purchases of usually over $300. You get a year of financing interest-free. The catch is if you don't pay off the purchase within a year, then the entire amount of interest for the year on that purchase is added to your bill. So you need to pay it off before the year ends and if you owe nothing else on that account, your payments will be credited to that balance.

Here's the catch: Say you buy a stove on this special interest-free rate. Six months later, you have to get a television but it is a regular credit purchase. From then on, your payment will be applied to the television and not the stove. The same applies if you had a previous regular balance and you bought the stove. Your payments will not be applied to the stove but to your previous balance. Nothing is being applied to your stove purchase, which must be paid off within a year or you pay accured interest.

Here's what they don't tell you at the store: You have to call the customer service number on your credit card and request that your payment be credited to your interest free purchase. (This is if you owe another balance) Also, you have to make more than the minimum payment. Say you pay $130 and your minimum due is $30.
They will apply the $30 to your balance in full and you can tell them to apply $100 to your interest free purchase. This is the only way you can get your interest-free balance reduced.

I just thought I'd pass this on. I happened to be standing at a counter and heard a clerk who was friends with a shopper explain this to her. I have bought a few things on the "interest-free" deal but I was never told this by any of the sales people. It would definitely help to know this is how that deal works if you do have to make another purchase before the year is up.