Insurance cover by using a Credit Card

Rosiest_2

Given that I can buy furniture at DFS with one year (no payment) followed by 3 years 0% credit, how best to pay by credit card and so be covered should the company go bust without supplying my order. Why would I pay up front when I can get the interest on my money by keeping it invested? But then I would not have the credit card cover if anything went wrong.

mountainofdebt

Pesonally I think DFS are very expensive for what they supply.

Think about it...how can they afford to give their customers effectively 4 years interest free credit if the interest isn't loaded into the prices?

As for paying for the items with a credit card and get the same 0% deal is if you initially get a card that offers 0% on purchases and then switch the debt when that deals run out onto a 0% BT card deal. Obviously this would have to be done each time the 0% deal runs out until the debt is repaid.....but in my view you would still be paying DFS for the privilage of their 0% deal but not using it.

Newbird

Rosie, did you mean pay DFS with your credit card after a year? when you have to make a payment? or just an alternative to the 3 years credit?

Rafter

A credit agreement, whether it created by a credit card or a store credit agreement like this, or a loan is all covered by the consumer credit act.

I'm not sure how it works with DFS and whether you sign the agreement with them or a bank though.

However, If you don't pay them a penny for a year, then I can't see how there is any financial risk to you if they don't deliver?

The warranty on a sofa is probably only a year anyway so there seems to be very little risk involved.

As mountainofdebt says though, the price of the credit is effectively built into the product price though, so you end up paying in the end.

R.

bob_builder_2

Rafter wrote:

A credit agreement, whether it created by a credit card or a store credit agreement like this, or a loan is all covered by the consumer credit act.

I'm not sure how it works with DFS and whether you sign the agreement with them or a bank though.

However, If you don't pay them a penny for a year, then I can't see how there is any financial risk to you if they don't deliver?

The warranty on a sofa is probably only a year anyway so there seems to be very little risk involved.

If you have signed for the 0% deal but DFS do not deliver your sofa would you still not be held liable to pay off the loan after the year (as it is probably with some unconnected bank who have already paid DFS when you signed the agreement)?

Rafter

Bob,

No. Under the consumer credit act a bank or other finance co cannot force you to pay off a loan if the goods have not been delivered. The bank and the retailer are equally liable for ensuring that delivery takes place.

This only works for loans and credit cards though. If you use a debit card you are not covered, although it is worth pursuing with your bank, particularly if the payment occured when your current account was overdrawn. You can then argue that the consumer credit act aplies because technically you were taking out a loan.

R.