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Original poster

Interest free credit or use savings for new sofa?

41 replies

gaggiagirl · 19/01/2017 21:35

Need a new sofa. My last sofa cost around 2k and has lasted us 12 years.
I have the money to buy a new one in my account. If I use it for a sofa then I have very little 'rainy day' money.

If I get the interest free credit I'm saddled with another bill for 4 years.

Can somebody wiser than me please advise?

OP posts:
jumpingcold · 19/01/2017 21:41

Interest free credit and put the balance in a separate account with a standing order? Then it's there if you REALLY need it?

PinkSwimGoggles · 19/01/2017 21:44

pay directly.
what if you cannot for whatever reasons keep up with the rates?

Crispsheets · 19/01/2017 21:45

I took interest free credit just for 6 months. Couldn't face paying over 4 years.

Reality16 · 19/01/2017 21:46

Always pay for something if you can. I don't see any point in keeping money and taking on credit. If you keep your rainy day fund and something goes wrong you will have to use it to make the payments anyway!

wevegottobeathemdown · 19/01/2017 21:51

@reality You've lost 4 years of accruing interest doing that. Why not keep the money in your bank account if it's 0% interest.

Redcrayons · 19/01/2017 21:51

Chloe is pissed again.

Redcrayons · 19/01/2017 21:51

Wrong thread oops

cozietoesie · 19/01/2017 21:53

You had me wondering! Grin

TheresABluebirdOnMyShoulder · 19/01/2017 21:53

Take the interest free credit. The money may as well be accruing interest for you as for the sofa company. But only if you can be 100% sure that you'll make all the repayments. One penalty for a missed payment will wipe out the benefit and then some.

Original poster
gaggiagirl · 19/01/2017 22:26

Lots to think about here.
If I can take the interest free credit over 6 months or a year that would be great if that's an option.
Or maybe... Maybe.. Sofology or Dfs or whoever might offer a discount for cash?? I'm not sure if they are able to.

OP posts:
PinkSwimGoggles · 19/01/2017 22:29

also look for fees. the credit might be interest free, but the company might charge an admin fee.
and yes to discount for paying straight away.

MacTaylorsSecretWife · 19/01/2017 22:32

I always take the 0% option if there is one. Keep the savings offsetting my mortgage as there is a bigger benefit there for me. If it's £2k over 4 years then it's just over £40 a month which personally would just come out of our normal monthly spends so the savings would still be maintained for any emergencies that might crop up. Plus you'll always have the option to pay it off early if you don't want that monthly commitment.

Reality16 · 19/01/2017 23:44

You've lost 4 years of accruing interest doing that. Why not keep the money in your bank account if it's 0% interest.

I would rather lose the interest over 4 years than take on debt.

BarbaraofSeville · 20/01/2017 09:57

It's only debt if you aren't disciplined enough not to spend the savings that cover it.

I make a few hundred pounds a year by borrowing money at 0% to put in savings accounts that pay interest.

Reality16 · 20/01/2017 12:43

It's only debt if you aren't disciplined enough not to spend the savings that cover it.. No. It's debt.

Gooseygoosey12345 · 20/01/2017 12:51

You can take 0% credit for any term up to 4 years of they 0% for 4 years normally. I would take the credit for as short as possible with reasonable payments, you said you have the money in your savings so if anything happens you can still pay it off. If you're still torn look on Money Saving Experts website

NameChange30 · 20/01/2017 12:56

I'd compromise and see if I could get 0% interest over 2 years.

If you use your savings to buy the sofa and unexpectedly need the money in future, you may not be able to borrow it at 0% interest.

MoneySavingExpert has good advice on this, they advise ensuring you have savings for emergencies and say there's nothing wrong with borrowing on 0% interest provided you are disciplined/organised about paying it off.

DH and I have credit cards that's 0% interest if we pay them off in full every month, which we do. Technically that's "debt" but it's not an issue.

UrethaFranklin · 20/01/2017 15:23

I've just bought a sofa from DFS and had the interest free credit over 30 months which is 2.5 years. You don't have to have it over 4 years, you can choose any period you like.

Original poster
gaggiagirl · 20/01/2017 16:54

Thanks so much for the advice everyone. We are going for a look this week. Still not sure what I'll do just yet but I'm leaning toward just paying for it outright.

OP posts:
Chasingsquirrels · 21/01/2017 13:52

I took 4 years interest free credit at DFS. I had the cash to pay for it but they wouldn't give a discount for cash, so I got my discount from the extended credit terms.
Yes it was a debt, but it was more than covered by my cash assets if I wanted to clear it at any point.

Original poster
gaggiagirl · 21/01/2017 17:04

Just made a purchase! It was 2K again. They wouldnt offer a discount for cash. How very dare they!! Wink
I paid a £500 deposit, and I've taken the interest free over 6 months. So should my boiler or car breakdown in the mean time I still have cash to fall back on, but I'm also not saddled with 4 years of repayments.

OP posts:
OurBlanche · 21/01/2017 17:09

We always take the 0% offers. Over 6 - 18 months, depending.

Then I put the cash in a higher interest 28(ish) day access account. I gain the interest and can still get at the cash to pay it off if I have to.

That also means you add to your credit rating in two ways: 1. regular payments and 2. Savings account

Martin Thingy suggests this is the best thing to do if you can afford it and can lock away the money with no issue.

Avoiding all debt at all costs can be detrimental to your financial profile!

PinkSwimGoggles · 21/01/2017 17:11

sounds like a good compromise.

SecretRed · 21/01/2017 17:45

No such thing as a high interest savings account nowadays.

NameChange30 · 21/01/2017 17:47

Meh, I still think it would have been better to take the 0% interest deal for longer. As most of the people on this thread said. Unless you can save £1k+ in the next 6 months, you're going to be a bit stuck if you get an unexpected big bill in 7 months' time.