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Once I paid off the last of my credit card balances, I made a vow to myself to never carry credit card debt again. So far, I've been true to my word.

I still use my credit cards, but only for the rewards. Each month, I payoff the balance in full so I don't have to pay interest.

My rental property needs to have the carpet replaced on the second level. The carpet is the original builders grade carpet from when the house was built in 1998. The previous owners had kids so the carpet was in pretty bad shape when I bought the house. I was going to replace it a few years ago until I decided it was going to be a rental property. I felt that with a good cleaning, the carpet would last a few more years.

My current tenant has been there for 3 years and hasn't really said anything negative about the carpet. I was over at the house this past weekend checking on another issue and noticed the carpet was looking pretty bad.

I went to one of the "big box" stores to get some pricing and get an idea of how much replacing the carpet would cost. The cost was actually a lot less than I thought it would be. The store has an ongoing offer of entire house carpet replacement for only $139. The total cost to remove the old carpet, haul it away and replace with new carpet and paid should be around $1300.

I have the money sitting in a savings account earmarked for rental property repairs. When I got home, I had a coupon in the mail from the same "big box" store for a 12 month "no payment, no interest" promotion. Generally, when I get these, I just trash them because there isn't anything I need to have done to my house.

This time, I'll be taking them up on their offer. I will keep the money in my savings account and just make equal monthly payments instead of totally emptying out the account.
I'll make sure the balance is paid in full before the interest starts to kick in and I'll setup automatic payments to make sure I don't miss the due date.

Usually when companies have offers like this, they are hoping that you:

A. miss a payment so they can jack up your interest rate and charge you interest on the full amount you originally charged.
B. haven't paid off the balance by the time the interest free period is up and they will start charging interest.

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  1. Anonymous // July 27, 2009 at 7:45 AM  

    They are betting that something happens in a customers life that will require them to extend the term of the credit. Full interest accrues during the "free period. It's far more than a "hope", human nature and their mastery of the subject proves them right enough to keep making offers. They do it because it works. Consumer credit companies are not dumb. Good luck.

  2. Frugal Urbanite // July 28, 2009 at 8:55 AM  

    We did the same thing when we had out carpet installed and when we bought out living room furniture. We had the cash outright, but paid it off monthly (at 0%) so the extra money could at least gain interest in the bank.

  3. CrystalGB // July 28, 2009 at 3:53 PM  

    Even though we have the cash in the bank to make a purchase, we have done this several times without any negative results. We divide the amount into 11 payments so that we have it paid off a month in advance.

  4. Single Guy Money // July 28, 2009 at 6:29 PM  

    @Frugal Urbanite: That's my plan. It's only a few extra dollars but every bit helps.

    @CrystalGB: I plan to pay mine off in 10 months so there won't be any problems.

  5. cherilynn // July 29, 2009 at 2:48 AM  

    A very helpful post!

  6. Anonymous // July 29, 2009 at 10:12 AM  

    Did this recently in my rental unit. Found out the carpet installer gets only $40 of that $139 and installs on the side for only $75. AND, if he has remnants, he includes them in the $75 price. Something to think about

  7. payday loans // September 4, 2009 at 6:30 AM  

    it is verry hard to use credit into your advantage unless you have a good investing gig.