Interest Free Credit Dilemma

[Kinky]

I'd be interested if anyone has any thoughts on where I stand with my situation below ...

I purchased something last summer, with a 10-month Interest Free Credit. So I was expecting to pay the full amount outstanding in April of this year.

The only paperwork I have regarding this is the receipt from the shop, at time of purchase, and a faxed copy of the contract, from the shop, again at the time of purchase. Since then I've received nothing from them

This morning I receive a letter from the financial company telling me that they've just setup my account - and that I have 1 years interest free credit, starting now.

Which now means that instead of having to pay in full in April (as expected) I now have until Feb 07 to pay.

My question is: is the faxed contract the legally binding contract - and I pay in April, or do I go by their formal letter, which says I pay in Feb '07?

I should stress I'm not fussed if I pay in April or next year - although I'd be happier paying next year, as I'm getting an extra years interest on the money!

For reference, if I decide not to pay in full - I can then start paying in installments, which are at 28% APR ..... yeah right!

Interested in any thoughts.

K

[Piglet]

Are you really sure this isn't an additional 1 years interest free credit for new purchases? It sounds to me like a trap for the unwary!! You think you've got another year when actually the period for your existing purchase has finished.

The usual deal with these is that they are only interest free if you settle by the due date. If you don't settle you get charged interest at their rate back to the date of purchase NOT just from now onwards.

I'd either just settle it to be safe or ring them and ask specific questions making sure you get specific answers, note the time/date of the call and the full name of the person that you speak to. If in doubt then write to them confirming your understanding of what you've been told.

These people make their money by encouraging people to "forget" to settle so I'd be very careful!

[Olf]

ring-em.

[unlogic]

Olf said:

ring-em.

Agree
Sounds well dodgy
Could be leading you into a "false sense of security" and all the time they are adding gross amounts of interest on from April

[Kinky]

unlogic said:

Could be leading you into a "false sense of security" and all the time they are adding gross amounts of interest on from April

Yeah - thats what I'm thinking.

Then, when I came to argue it - their response would be along the lines of ...."well - the contract clearly states ......"

I'll pay in April anyway - no matter what - at least I'm clear then.

K

[touchingcloth]

I would pay, you have had what you thought you were getting so no point taking a risk. It sounds like they are either being sneaky (in which case you don't want to deal with them), or they have fooked up bit due to incompetence (so again you do not want to deal). Cannot see what they would really gain from genuinely offering an above board addition free interest period.

The catch in most of these interest free periods is that once the interest free period is over you become liable for interest on the borrowing, sounds reasonable enough except the interest is (usually) then backdated to the purchase date and doesn't just start from the day you finish the interest free period. At 28% that's a nice little sum to add to the amount you sudddenly owe.

>> Edited by touchingcloth on Saturday 18th February 10:45

[Kinky]

I'm re-reading the letter again carefully - in case I've missed something obvious.

It does say that I have 2 options - 1 - pay the full value financed on or before Feb 07, or 2 - make a monthly payment, starting Feb 07, and continue to do so until the full balance is paid (almost double the original value).

Interestingly, it does say "In order to avoid charges for outstanding payments, please ensure all payments are made in full and on time as per the terms of your agreement".

As far as I'm concerned, the terms of my contract says April 06 .......

I wonder if (as suggested by posts above) that this is a slimey sneaky way of ensuring you get trapped into the interest payments. Simply reading the letter "suggests" they have cocked up and started my contract 8 months late - therefore an extra years free credit.

There's absolutely no doubt now - I'm certainly paying it in full in April!

Thanks to all the replies - most sincerely appreciated.

K