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Interest free credit - How does it work?

Hazel_ · 2012-12-26 20:17:07

I get the basics as a consumer - You borrow x amount and if you repay it before the date specified you won't pay interest. But for a retailer how does it work? I'll use DFS as an example. They give you 4 years interest free credit, So if the suite costs £1000 and the credit is supplied by Bank A, Do Bank A pay DFS £1000?…

Comments

Cornucopia Posts: 16,513 Forumite

28 December 2012 at 9:43AM

To be clear, and to be fair to DFS, their 0% is a simple HP-type scheme. The payments are equal and fixed in advance to clear the entire balance by the end of the interest free period.

Only people who run into difficulties would have any reason to incur penalties: either interest or fees.

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