I received this message which may be worthwhile taking a second look before you
draw your card.
Shawn
A finance professional last week told me he had a great tip for MoneySmarts.
He said the 0% interest rate promotions are a sham. Yep a clever cover up, a
daring deception, a trap for the millions of unsuspecting shoppers in this
great big mall of a country.
Unfortunately, he declined to be identified, but he was willing to explain all
the details. So MoneySmarts went money myth busting to find out if his claims
were for real.
Hot glue gun stuck to the end of my nose! I was surprised how easy it is to
make money in this country. Here is what I found.
If you are like me, you go shopping at least once a week. Or at least go window
shopping. You find that as you browse the shop windows, your eyes constantly
stray to digital cameras (the hot craze right now), laptops (I especially like
the razor-thin ones because Im hardly 5 feet tall and lugging around more than
two kilos of computer equipment is not my idea of a good day), plasma
television and aircondition units because of this terrible summer heat.
These are by no means cheap items. But hey! Theres a 0% interest installment
promo and all my three credit cards are accepted!
Now, heres the deal. Swiping a credit card removes the pain of having to fork
over a huge amount of money and it is very convenient. But we have been told
hundreds of times not to use the credit card just to look good because the
interest will kill us. Well this time, theres no interest to pay. So why not
jump at the chance, right? Sounds like a great deal.
Wrong.
The Canon 400D camera cost P48,500. Its interest free if you pay for 12 months.
The monthly payment is P4,042. Cut down to monthly bite-sized pieces, it
doesnt look too painful. Then I asked the clerk, What if I dont want to pay
by credit card? I want to pay in cash.
Mam, its P44,950 if you want to pay in cash, she says.
Technically, theres no violation of Administrative Order 10 issued by the
Department of Trade and Industry, which put a stop to the practice of putting a
card price and cash price in one price tag. But if you pester the clerk in a
nice manner, he will tell you that he can give you a discount if you will pay
in cash.
So, is the 0% interest for real? MoneySmarts concludes the nice round oh is
just a figure, often in red, to catch peoples attention. The interest has been
included in the price already. If I pay P4,042 a month for that Canon 400D, I
will be paying 12% interest on this installment promo and not 0%. If I pay in
cash, I would save P3,550 thats almost 2 gigabytes of additional memory for
the camera.
If your aircondition unit at home is up for replacement, then go for the deal
because the 12% interest is much less than the regular 42%. But dont let the
deciding factor be the attractive 0% deal, because it aint what most people
think it is.
Louie Domingo
Director, e
(+63919) 6138210
(+63922) 5270767
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