smart spending

6 ways to avoid financial Groundhog Day

Repeated mistake: Messing up no-interest deals
Repeated mistake: Messing up no-interest deals © Stephen Rees/Shutterstock.com

You know the drill. You make a big purchase (anything from furniture to medical care) and get a year or more to repay the bill without interest.

It's a great deal if you can pay it off before the deadline, but it's expensive if you don't, says Susswein. That's because after the deadline, you pay interest on the entire bill from day one, not just the unpaid balance, says Susswein. And many people "may not realize that," she says.

And when those delayed interest rates kick in, they're often above 20 percent, she says.

The key to avoiding the zero percent financing trap: Plan to pay it off at least a month or two in advance of the lender's deadline, she advises. If you get hit with a financial emergency, or if that last payment doesn't arrive on time, you'll still have some breathing room, Susswein says.

"People have to ask questions," Susswein says. Things like: No payments for how long? When does the interest kick in? What will the interest rate be? And what is the deadline for getting the bill paid to avoid interest?

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