Interest-free shopping 'can ease debt problems'

Tuesday 20 July 2010

Article by Mozo

Australian consumers can avoid accumulating huge debts by using interest-free retail promotions to purchase "big-ticket items", it has been suggested.

GE Money managing director Greg White told the Advertiser that more than 80 per cent of its customers never pay any interest on such purchases because they pay off the full price within the interest-free period.

However, shoppers were also urged to set up a direct debit to ensure the purchase is paid off in the interest-free period.

The comments may interest Aussies looking to compare debit cards and minimise their spending risks. Gerry Harvey of the furniture and electrical retailer Harvey Norman told the newspaper that while some people take advantage of interest-free store promotions, others get it wrong and still end up in debt.

"People tell me all the time that they are on their fourth or 21st interest-free purchase," he said. "But the ones that write us letters and are very unhappy don’t pay, and get hit with the penalty interest rate.

"It is pretty hard to be too sympathetic if they’ve had two years or 50 months interest-free and they still have not paid it off."

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