George Kamel: ‘There’s Always a Catch’ With a Zero-Interest Loan — Here’s Why
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Laura Beck
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Amber Barkley
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Financial expert George Kamel wants to warn people about zero-interest loans and 0% APR deals. He says these offers aren’t as good as they seem and can actually cost you more money in the long run. In a recent YouTube video, he explained why these deals are tricky — and what you should watch out for.
The Big Catch: You Might Overspend
Kamel said the main problem with zero-interest loans is that they make you buy things you can’t really afford. Stores use these deals to get you to make big purchases without thinking it through. If you can’t pay for something in cash right now, Kamel thinks you probably shouldn’t buy it.
Hidden Costs in the Price
When stores offer zero-interest deals, they often raise the price of the item to make up for the money they’re not getting from interest. This means you might end up paying more for the item than you would if you just paid cash.
Car Dealerships and the Full Price Trick
Kamel pointed out that car dealerships often make you pay the full price — called MSRP — to get a zero-interest deal. This means you can’t negotiate a lower price, which you might be able to do if you paid cash.
Extra Fees and Upgrades
Salespeople might try to add extra things to your purchase, like warranties or upgrades. They make these sound cheap by spreading the cost over your monthly payments. But Kamel warned that this can add up to a lot of money over time.
The Difference Between ‘No Interest’ and ‘0% APR’
Kamel explained that “no interest” and “0% APR” are not the same thing.
- “No interest” deals often charge interest in the background. If you don’t pay off the full amount by the end of the promotional period, you might have to pay all that interest.
- “0% APR” deals don’t charge interest during the promotional period, but you’ll start paying high interest on any remaining balance when it ends.
Tricky Payment Schedules
Kamel warned that lenders might set up your payment schedule so that you don’t quite finish paying by the end of the promotional period. This means you’ll end up paying interest even if you make all your payments on time.
What Happens If You’re Late
If you miss a payment or are late, Kamel said there can be extreme consequences. You might lose your promotional rate, face late fees and even have to deal with debt collectors.
The Real Way To Avoid Interest
Kamel’s main advice is simple: If you want to truly avoid interest, pay for things in full with cash. This way, you’re not playing the lender’s game and risking extra costs.
Kamel believes that zero-interest deals are designed to benefit the lenders, not the customers. He wants people to be careful and think twice before signing up for these seemingly good deals. Remember, if it sounds too good to be true, it probably is!
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