Risks of Q-Card and other financing options

[Curious]

Hi - what's your take on using QCard or similar to finance home improvements? For instance we wanted to get a heatpump installed and the company rep was pushing quite hard for using his QCard 18 months interest free + no repayments offer. I'm not very keen on credit cards, only have one with the minimal limit possible, so I never thought about applying for a QCard.

But then .. 18 months interest free sounds quite good and after that I can easily pay it off and get rid of the card, can't I? Are there any other risks?

Also do you know how much the heatpump people get from QCard for a sign up of a new client? I bet that must be the reason behing the sales' rep pushing. I would be a lot happier if I got the heatpump cheaper than being part of a QCard game I didn't want to play.

Any thoughts?

[Bob Kane]

But then .. 18 months interest free sounds quite good and after that I can easily pay it off and get rid of the card, can't I?

Yes

Are there any other risks?

No.

[Craig Pope Mortgages]

Hello, its likely the heatpump people are getting a cut but it will be minimal. It's probably irrelevant anyway as long as you have got 2-3 quotes for the same heatpump installation. Once you decide who is the best value, then you can make a call on how you finance it. Cheers

[Perry]

I've looked at a few things like this. I disagree
with Bob that there are no other risks. The fine
print must be read scrupulously. Booking fees
lurk, plus timing at the end. E.g. If you're a day
late settling, the free interest becomes payable
and other such traps. Proceed warily and get
all the details correct.

Also, it's very easy to forget some detail that
needs action in 18 months from now and that
may be just what Mr Q hopes for.

[Wayne]

Also, it's very easy to forget some detail that needs action in 18 months from now and that may be just what Mr Q hopes for.

That would be the main risk I see - 18 months is a long time to remember to pay. Not a day late!

[smilverpeech]

That would be the main risk I see - 18 months is a long time to remember to pay. Not a day late!

No risk if you use google calendar every day.

[Wayne]

No risk if you use google calendar every day.

18 months is a long time - there is always a risk!
Maybe not great but try blaming Google if, for some reason, in the next 18mths that appointment gets dropped.
Nothing is fool proof - all you need is a bigger or better fool.

[Perry]

From another web site . . .

No interest for 500 days is available on Q Card Flexi Payment Plans. Minimum purchase $499.
Account Fees may apply. A $45 Establishment fee for new Q Cardholders and a $35 Advance
Fee for existing Q Cardholders will apply. Minimum payments of 3% of the monthly closing
balance or $10 (whichever is greater) are required throughout interest free period. Paying
only the minimum monthly payments will not fully repay the loan before the end of the int-
erest free period. Q Card Standard Interest Rate applies to any outstanding balance at end
of interest free period. Offer available from 5th-6th April 2014. Q Card lending criteria, fees,
terms, and conditions apply.

More terms and conditions than you can wave a stick at.

[Perry]

As a personal example of how easy one's errors
make money for the bank . . .

I pay my CC in full, every month. One month I made
a mistake and paid the same amount as the previous
month. That was $238.86 short for the current month.

Result: an interest charge of $83.02 for the month.

That's about 410% interest rate.

That's another way banks make money.

I don't think they'd've given me $83 interest if the months
were the other way around and I'd paid $238.86 more
than needed, for the current month.

If I buy something on my CC and it doesn't appear on
my statement, some time in the future, I just may not
say a word about it. Well, it wouldn't be my mistake,
now, would it?

Yes, I know: why should I let others dictate the way
I act? Just once, perhaps?

[Lanthanide]

I've just signed up for a Q Card to get 12 months interest-free deferred payments on a carpet installation of a touch under $9,000 in my rental (soon to be sold, hence doing it up).

There's only a couple of risks here really:
1. You apply for lending and the bank doesn't like this extra debt being against your name. This would be more problematic if you're switching to a new bank and they can't see your usual payment history for CCs etc.
2. At the end of the interest-free period, you don't actually have the money available to pay the debt off in-full, and so end up being charged interest.

For #2, I simply only put things on these long-term credit plans if I actually have the cash up-front, in which case I can deposit it in my rabo account, sight-unseen, and wait until the time comes to pay it off. The only problem with this approach is if you have some sort of financial emergency in the interim where you're forced to dig into this money, but if it's an emergency then "money now" almost certainly beats "interest payments later" anyway.

[Perry]

If you have that well-thought-through plan,
it sounds like a good idea, despite all those
assorted interest-disguised-as-fees, such as:
* booking
* advance
* establishment
and whatever add-ons.

[Lanthanide]

The only fee I had to pay is an $45 establishment fee, which is actually the annual card fee (like a credit card has). Weirdly it is charged in halves at $22.50 every 6 months. It seems like I'll be able to pay up the balance before the interest free period ends and potentially close the card account without having to pay the other $22.50 (or they might try and pro-rate it - who knows).

Actually after I've paid it off, I'm going to see if they'll waive the $45 annual fee forever, and if not, I'll cancel it. I figure they'd probably want me as a customer.

[Perry]

Don't forget to report
back on how that goes!

[yaka6]

If you are not happy with the goods or service you cannot hold back any payment!!!

[Lanthanide]

I'm sure you could, if you contacted the CC company and explained the problem and provided documentary evidence. Obviously it's much more difficult than a payment mode in which you initiate the transaction, but probably not much more difficult than if you had paid for something with a regular bank CC and then subsequently wanted to dispute the charge. Also the CGA will usually see you right and if worst comes to worst, take them to small claims court.