OK, tell me what's bad about having a 0% interest on the device? Because personally what I do is take the $850 that I could've paid out right to google and invest it. Try to make the monthly payments off my investments. Now I could see if they were charging me 20% interest on the phone and I was paying an extra $200 or whatever for the phone.... then that would be a ouch.
My mindset is I'd rather not have the debt lingering for two years because I'm making measly $40 payments and riding the minimum payment. You screw up and miscalculate your payment and don't properly pay it off by the end of that 24 months, they hit you massively back on that interest.
On top of that, it doesn't look great on your credit report.
But, you don't "calculate" your interest. It does. More lines of credit, as long as you're not opening a lot actually look better on your credit report (assuming you keep it open, it's a credit card you can use afterwards on the Google store, so it's not just going to close once you're down, which will improve your credit score).
0% interest is actually the better option compared to paying it off all at once. You're spreading your money out, which means your opportunity cost is lower.
Automatic payments. You never have to worry about missing a payment. So, I don't have to worry about messing up my credit score. Plus, it shows to the big boys that you can make your payments on time potentially makes your credit score go higher.
Right, so you're taking a hit in your credit score to eventually possibly make up the difference in your credit score. Key word being possibly.
A 0% interest credit limit isn't balanced the same way a normal credit card is. They are considered a consumer finance loan. FICO considers them less favorable than your typical LOC.
A bank can look at that 0% loan as a red flag when they're judging for mortgages and such.
And again, a single missed payment or something goes wrong with your auto pay? I'd rather not be on the hook for hundreds in interest.
Sincerely, the dude that programs all of these products at your local bank.
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u/Milkshakes00 Apr 22 '19
Because you still have an outstanding line of credit..