Free Money

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With interest rates already low, many companies are offering zero percent financing to move big ticket items. Should you take advantage of this "free money" or leave it on the table?

The definitive answer is ... it depends. As with all financial decisions, there are a number of factors to consider before taking action.

• Don't be Swayed: Don't take a zero percent financing offer to buy something you wouldn't buy or couldn't afford otherwise. Remember you still have to pay for it --you are just getting a grace period before financing charges kick in.
  

• Don't Pay More: Make sure that you are not paying a premium to offset the costs of the zero percent financing. Shop around and compare prices.
  

• Don't Miss the Date: Whatever you do, make sure you will have no problem paying off the financing by the end of the zero percent period. Most of the zero percent financing offers revert to astronomical interest rates if you miss the payoff date by even a day.

The bottom line is, if you would be making the purchase anyway, it is at a good price, and you are sure you will make the payoff date -- go for it. You will essentially have free money for the financing period. You can keep your money in the bank or otherwise invested until time to settle up. Free money, even if it is temporary, can be a good thing -- just use it wisely.

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