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Is 90 Days Same as Cash REALLY the Same as Cash?

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I could make this the shortest post ever at Stacy Makes Cents because you know I’m not going to condone or encourage debt, even if it is “90 days same as cash” or some other no interest loan.  However, let me explain WHY I don’t believe in these “free money” programs and why they simply don’t make sense.  Let’s go through five reasons:

  1. As many as 80% of people don’t pay it off in 90 days – While I couldn’t find an exact number on this (I found numbers from 60%-85%), the stats were all EXTREMELY high on those who buy something on a 90 days same as cash (or similar) and don’t pay it off within those 90 days. When I did collections, the number often quoted was 68% of those who did a 12-month same as cash promotion didn’t pay it off in that promotional time.  What did this do to save you any money!?  You might as well not have gotten any promotion at all – you simply borrowed money to make that purchase, which is exactly what the company designed the “promotion” to do.
  2. Interest accrues – Guess what happens if you don’t pay that interest-free promotion before it expires? In most cases, you have to pay all the interest that built up (accrued) during that promotional period.  Let’s look at a quick example.  If you buy a $5,000 new bedroom suite on a 1-year no, interest promotion and don’t pay it off by the end of that year, expect to receive a bill with a $1,500 interest charge on there.  Yes, 30% interest is pretty normal for a furniture store and 30% of $5,000 is $1,500.  OUCH!  In other words, you’ve paid at least $6,500 for that bedroom suite just by not paying it off before the year’s up.
  3. Debt = Risk – Before working in collections I wouldn’t have included this reason in my list of concerns to buying on a same-as-cash promotion.  But one of the most common reasons I heard as to why someone couldn’t pay their bill a few months after making the purchase was because of some unexpected event that came up.  When you take on ANY debt, you’re taking on a level of risk.  Don’t overlook that…it is simple but catches a lot of people.
  4. You’re Counting Chickens – You’ve heard the phrase “don’t count your chickens before they hatch,” right?  When you buy something on one of these promotions, you’re doing just that.  You’re buying something ASSUMING you’ll have the cash in hand to pay for it when the bill comes.  If you have cash in hand to buy it but decide to put it on the promotion, you’re ASSUMING the money will still be there when the bill comes.
  5. Companies Offer Better Alternatives – If companies are offering 90 days same as cash, they’re usually offering some alternative to that program that is even better if you’re truly a cash buyer.  For example, car ads and furniture stores push this type of thing all the time: “0% APR or no sales tax this weekend only!”  What does this mean?  With no negotiation at all, if you can pay cash, you’ll get a 9.5% discount in Tennessee (where I’m from).  Isn’t that the same as paying 9.5% interest if I go with the 0% APR option?

Okay, I’ll stop there because I want your input.  Any horror stories on these programs you want to share?  Want to argue the point and have a good example or two of when these promotions have allowed you to “cheat” the system?  I’d love to hear from you!

*This post is linked at Frugal Tuesday Tip on Learning the Frugal Life, at Frugal Friday on Life as Mom, and at Frugal Days Sustainable Ways at Frugally Sustainable.

Comment Policy: I love hearing your thoughts and input on what I write. Since I write about what works at my house, what pleases my handsome hubby and darling children; I'm sure we'll disagree sometimes. In those cases, do what's right for you and yours. As with any form of communication, please only post comments that move the discussion in a positive direction.

About Barry

Barry is the husband half of the Stacy Makes Cents team, responsible for all the marketing, website development, sanity management and taste testing. Barry writes about personal finance issues, helping people get out of debt, live on a budget and make the most of every cent that comes into their hands. He is the author of From Debtor to Better: The Details of Debt and How to Get Out! and writes periodically on his own site, Debtor to Better.


  1. Well said, Stacy. I often say debt is slavery. I like the statement debt = risk, too, though because it causes people to think. No one knows what the future will bring. Its best to save up the money when you want something. Personally, once I have worked hard to save up the money I’m in no hurry to part with it!

    • Debt IS slavery…or else The Word wouldn’t have said so. :-) Preach it! And I’m pretty close to my money too. lol

  2. Well, I have to say, I’m one of the guilty ones. I use these promotions for all of our big purchases, but it’s usually the 12 month length. But, I have NEVER, EVER paid any additional fees, interest or otherwise. My husband would probably say I’m fanatical about paying them off even before the deadline and I am :-) The rules have changed over the last couple of years too, at least for the 12 month payoffs. Now, you have to make a minimum monthly payment. You can’t just wait ’til the end and pay the whole amount. I never go by the minimum payment the company bills you for though because it doesn’t work out to having the whole debt paid off in time if that’s all you pay each month. It leaves you with a pretty large lump sum payment at the end and I’m sure that’s where a lot of people get stuck and end up having to pay all the finance charges.. I take the whole debt, divide it by say 10 months (just to have that safety net) and that’s the amount I pay each month. No Matter What. If you miss or are late on one of your monthly payments, you get slammed with the interest. I would definitely agree that most people should stay away from these programs. You have to be very disciplined to use them and you have to be absolutely committed to paying the debt off in time. Otherwise, you’re absolutely right, you’re just giving your money away and I for one am definitely not willing to do that.
    Thanks for the great post!!!

    • Yes, it takes a LOT of discipline….discipline that most people don’t have. That’s why these programs are so dangerous. We’re so glad you’ve never had to pay any fees!

  3. Ok…you totally used some great logic with point 5…yes. That would be like paying 9.5% interest in the long run. Never thought of it that way! In the past, (we make sure to have cash before purchasing), we would set the money aside and let it draw interest (little bit that it is) and then withdrawal the cash and pay in full before the promotional period expires. It had never occurred to me to ask about OTHER promotions…I just thought this was the best! Thanks Barry :)

    • Stacy says: I would be more comfortable knowing my item was paid off than I would having that little bit of interest. LOL

  4. Wow, I’ve never even considered buying something on one of those programs, but that is a really high percentage of people who don’t pay them before the time is up. What a waste of money!

  5. Although in the past we have purchased items on the 90 day same as cash plan and each time paid it in full before the date due I would not do it again. I always had that nagging worry in the back of my head that something could go wrong and it wouldn’t turn out good. We were fortunate.

  6. This is very good advice! We have done the no interest promotion before when we bought furniture. When we first got married to obtain our living room furniture it was either 18 or 24 months. We made sure that the purchase amount divided by the term was very do-able. We already had our emergency savings of $1000, which is recommended in case something unexpected “comes up”. Then when we moved into a bigger family home we took advantage again to upgrade our bedroom furniture. Both times the term was well over a year, closer to 2 years, so there wasn’t as big a risk that we couldn’t pay it off, and we already had savings. Fortunately it worked out for us both times.

    • Yes, you are very fortunate that it worked out – Barry counsels sooooo many people who thought they were “okay” and then life happened. :-(

  7. Christine says:

    My husband and I have used this option to purchase several items in our home. However, we had the 120 day same as cash option instead of only 90 days.

    We didn’t have the cash to purchase these items immediately, but this option (although agreeably risky) allowed us to get the item quicker than saving the money and buying in cash. We paid for the items in weekly installments even though only monthly was required. We had the items paid off in 90 days instead of 120 because of how we budgeted and structured our payments. This gave us a 30 day window of “wiggle room” should something come up.

    However, I do not believe we will do this again. We were fortunate that nothing major (such as a job layoff) occurred during this period. We really have become the type of people with the motto of “If you don’t have the cash to buy it, you don’t need it.”

    • Christine, I’m so glad you were able to make it before the 120 days! :-) Barry counsels a huge amount of people that are not so blessed….one of our friends was using this type of program and then had a heart attach – he was unable to work and unable to make payments. It was a very sad situation – even more sad to know it happens all the time.
      I think your motto is an EXCELLENT one to live by!

  8. Katie M. says:

    We bought my engagement ring on one of those 12 month no interest programs. We did manage to pay it off in the 12 months, but barely, and decided we would not do that again. Now if we decide to make a big purchase, we either pay cash, or if we do want to make payments, we see if they do layaway.

  9. Also consumers tend to buy something bigger or more than they need or planned to spend because they are not paying cash. Ever noticed how all the deals come up at tax season? They are counting on people spending their tax refund before it comes. Best to lump it out in cash. And nothing feels better than buying something you worked for, planned for, researched, etc.

    • Erin, you are SO right. The feeling I get when I purchase something that I worked really hard to pay for – man, it just can’t be beat. :-)

  10. I liked this because it came up at a time when we are mattress shopping for my son. The funny thing is I just saw that sign yesterday (0% apr or tax free) I told the lady when she offered financing that I was going to pay cash and I do plan on seeing if I can get a cash discount:) That being said I have participated in the same as cash promotions before in the past but I have ALWAYS paid those off before the promotion ends because there is no way I want all of that back interest. Guess we are part of the 20% that actually do it. Another point about it that I’ve learned while working in retail years ago is that if you make even one late payment on your account, the promotion stops and you start paying interest. There is that level of risk you are talking about. Thanks for the post!

  11. Thanks for the great reminder, Barry! What if you already have the cash in hand, but you want to do the 90 days to build your credit? We typically pay up front for everything but a lawyer (I think you know which kind!) recently told us we should try to rebuild credit by doing stuff like 90 days same as cash–even when we have the cash already?

    • Barry isn’t here to answer, so I will. :-) Why are you concerned with “building your credit?” You know why you need good credit? To borrow more money. :-)

      • Maybe it’s different there, but where we live, you need good credit to RENT a house or an apartment. You also need good credit to get many jobs! So, while I am no advocate of debt, I DO think rebuilding your credit is good. I am no fan of the credit thing, either. I mean, if you always pay cash and never get a loan or credit card, thus having no credit rating… you’re a risk. Makes no sense that the cash payers get penalized.

        • Yes, you’re entirely correct. You cannot rent in some places or get jobs at certain places….however, there are some places that DO rent or give jobs. How? They just want to see good past payment history. Get referral letters from landlords and get documents from the electric and water department that say you always paid on time…that’s usually what a landlord is concerned with anyway.

          If you’ve declared bankruptcy, most places won’t give you credit anyway….so, how are you to “build it up?” Make your other payments on time….then keep records of those payments.

          Think about Dave Ramsey. His credit score is 0…and yet, he has a home, cell phone, and car. :-)

          And you’re right – it’s VERY sad that cash payers are penalized for certain things. It makes absolutely NO sense. Still, I’ll take my cash anyday. :-)

  12. When we were young and naive, we bought a bedroom set on the one year plan, and we knew we had to pay it before the year was up to avoid the interest. As we learned shortly after the purchase, we decided to put into savings twice the amount we needed for this purchase; so at the ten month mark, I paid off the bed set AND wrote a check for our next furniture purchase at the same time. That allowed us to keep the same savings going for the next big purchase without using the rip-off plan ever again. Of course, to do that we had to NOT buy a new truck…but young people today find it so strange to have to wait for anything. Every young person needs a financial management course before they leave their parents homes!

    • I know….I find it odd the way people NEVER wait. For me, it’s a challenge to wait as I save up the money. Paying cash for something is so much more fulfilling. :-) I’m only 30, but I was raised by very frugal parents.

  13. Sally Nelson says:

    Although what you say about debt is true, Stacy, not everyone has cash on hand. When I used this kind of promotion, we decided what we could afford to save in the future, and used this amount to decide what to buy. We paid it off weekly – never got behind on the payments. While I agree that saving up ahead of time is the best idea, sometimes that does not work: disaster with a car, etc. If we approach the system sensibly, we can make it work to our benefit. When I worked in retail Computers, I always made sure my customers knew about the extra interest they would pay if they did not get to ‘zero’ on time… make sure you always ask about conditions – not all sales people are so up front.

    • Hi Sally! Barry actually wrote this post, but since we agree on these things, I’ll answer for him. :-)
      For us, if we don’t have cash on hand, we don’t buy it. If it’s something we need, we save up for the purchase and then pay cash. “Affording to save in the future” scares me a little bit…mainly because none of us knows what the future holds. Recently we had a family member who was seriously injured – he had no plan of that happening. In fact, he had every plan to finish paying off his remaining debt – but now he no longer has the funds for that….because he was counting on his “future” money.
      Saving up ahead of time really is the best idea, just like you stated. You said “sometimes that does not work.” You specifically mentioned car issues, so I’ll tackle that one. :-) If something were to happen to one of our cars right this second, we would either be a one car family while we saved for another car or we would use our $1,000 short term emergency fund to buy a “beater” to drive until we saved up the money. Normally we have a “car fund” that we put money in each month, but recently we’ve been putting all that money into the account to pay cash for our new home. This is exactly why having an emergency fund is CRITICAL:
      Approaching the system sensibly, for us, means to stay as far away as possible. :-)
      And you are very right about certain sales people – a lot of them withhold important information.
      Since Barry and I counsel people and aim to teach them to live debt free, we think it’s best to tell people to avoid these types of programs – simply because we’ve seen too many people get bitten in the hiney by using them.
      Thanks for the great comment! :-) I enjoyed responding!

  14. EXCELLENT article. I am currently torn between paying off debt and saving money to avoid future debt. There has to be a happy medium but my focus is so much on paying off current debt that I usually forget to plan for the future. Thank you for your wonderful blog and amazing attitude. :)

  15. Kelly @ Blue Jeans & Coffee Beans says:

    Love this post! More people need to think like this.

  16. You have to really be on top of things to make these deals work for you. I don’t want the stress of worrying about it.

  17. That percentage certainly explains what’s in it for the seller. I always assumed it was somehow sneakily added into the purchase price, but no–they’re betting on you not paying it off at which time they make a killing. Thanks for the enlightenment.

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