Money Mistake Monday – Forgot To Pay The Balance Syndrome.
This week’s edition of Money Mistake Monday is a very basic and simple one that I am sure more than a few people have made. You know how you get those 0% interest for X amount of time, and as long as you pay off the balance before the promotion ends, you don’t get charged? I missed paying one off once, and I got charged 12 months in interest. So much for making a promotion work for me.
I had bought a television at GoodGuys that was being advertised as having no payments and no interest for 12 months, and I figured as long as I sent a little bit of money each month I would be able to not pay any interest on this television! Whoo hoo! However, I didn’t do my math right and I did not pay the TV off by the time the promotion ended, leaving me with a much bigger bill seeing as how the interest had accumulated over 12 months at something like 22%. I felt like a complete idiot.
If you happen to take advantage of one of these type of deals, make sure you put the expiration date on your calendar or do your math correctly so that you do not have to pay interest. You don’t want that extra bill at the end because you did not plan accordingly!
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That is a really important lesson. Many people (including myself) usually don’t bother to keep up with how long the promotional period is and when the true APR kicks in. No problem if you don’t carry a balance, but if you do, it can be a booger. Thanks for reminding everyone of this — it’s definitely something worth paying attention to.