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In-store finance is traditionally offered through a store or company, particularly for big-ticket items such as furniture, electronics and jewellery. This type of finance usually gives you an interest-free period so that you can get what you want straight away and then pay it off in instalments over time or in full at a later date.
As well as finance offers you see in a particular store, there are some credit cards that provide in-store finance options, such as the David Jones American Express Platinum, the Gem Visa and the GO Mastercard. Many stores also offer interest-free payment options through Afterpay, zipMoney, zipPay or other similar services. Here, we go through each of these options so that you can decide if an in-store finance offer is worth it for you.
Imagine your laptop has just broken and you don’t have enough money to buy a new one. In this scenario, you shop around and find the laptop you want for $1,200 at a JB Hi-Fi store that has an interest-free payment plan available. You decide to weigh up two options: get a 30-month interest-free plan directly through JB Hi-Fi, or purchase the laptop on a credit card that offers 0% p.a. on purchases for 12 months.
This graph shows that the JB Hi-Fi in-store finance option attracts the least interest, even though it would take longer to pay off the laptop when compared to using the credit card. The best course of action, however, is to make more than the minimum repayment so you can pay off your purchase before the interest-free period is over.
In-store finance is offered to people who may not have enough cash to pay for something outright, or who want the flexibility to pay off purchases over time. For example, if you needed a new fridge but couldn’t afford the one that you wanted, you could consider one of these interest-free payment plans as a solution.
In-store finance options typically give you a set period of time when you can pay off your purchase without any interest charges – as long as you meet the repayment requirements. This could mean making minimum monthly payments towards the purchase, or providing the full amount owed at the end of a fixed period of time.
If you don’t meet the offer’s requirements, you’ll usually face additional fees and/or interest charges until the balance is cleared. As in-store finance offers vary a lot, it is important that you carefully read through the offer details before you apply.
Depending on your purchase, you’ll usually be able to get either of the following flexible payment options:
Regardless of the type of offer, you will usually need to meet a minimum spend requirement before you're eligible for an in-store finance offer. A deposit or establishment fee may also apply if you are approved.
It’s important to note that many of these plans are set up as credit accounts, meaning you will need to fill in an application that is subject to lending criteria and approval.
Your credit history and credit score can have an impact on your application, so if you’re not sure what details are currently listed, you can check your credit score for free online at any time. Another key point to remember: after you submit an application, the details will be added to your credit history and could also affect your credit score.
There is a small selection of credit cards that regularly give you access to in-store finance offers. The plans available vary depending on the card and participating retailers, but they typically offer you longer interest-free periods than you would get for regular purchases made on the card.
Below are some examples of the types of offers available on specific credit cards:
If you have one of these credit card and want to take advantage of an in-store finance offer, let the store’s staff know before you pay for your purchases. They can then explain the requirements and set up the payment plan. Alternatively, you could call your credit card company and ask about the requirements before you go shopping.
Some retailers offer interest-free payment plans that come with a credit card or give you the option of getting a credit card when you apply for finance. For example, The Good Guys has partnered with the Gem Visa for one of its in-store finance options, while Flight Centre and IKEA both offer interest-free finance options linked to a humm Card credit facility.
There are also many stores that offer interest-free finance through a HSBC Credit Card, allowing you to apply for the card and finance offer on-the-spot before you make your purchase. Often these cards have high standard interest rates that apply when the promotional period ends, so it’s important to check the rates, fees and other offer details before you apply.
Ask Finder: How long does it take to get in-store finance through a credit card?
If you have a few purchases to make and need some flexibility to pay them all off, you could consider getting a credit card that offers 0% p.a. on purchases for an introductory period. Depending on the card, this could give you up to 14 months when you can make purchases without paying interest (as long as you pay at least the minimum amount listed on each statement).
Alternatively, you could consider a card that offers instalment plans with a reduced or 0% p.a. interest rate. For example, the humm90 Mastercard offers interest-free instalment plans of 9, 12, or 15 months when you spend at least $250, while Citi may offer cardholders Fixed Payment Options with a promotional interest rate on eligible new purchases over $500. You can learn more about how instalment plans work in our full guide.
Platforms such as Zip Money, Zip Pay and Afterpay have changed the way many people shop by offering a "modern lay-by". For example, Afterpay lets you shop online or in-store and then spread the cost of your purchase out into four equal instalments that are paid fortnightly.
Zip Pay, on the other hand offers you a credit limit of $350, $500 or $1,000 that you can use for shopping online or in-store. You then have up to 60 days to pay off what you spend without fees. Check out our guide to interest-free finance to learn more about how these services work and compare other options.
If you’re thinking about applying for an interest-free payment plan, make sure you ask the following questions:
Whether you’re shopping for furniture, booking a holiday or need a new laptop, in-store finance gives you another way to make your purchase and pay it off over time. But watch out for rates and fees that can apply at the start and end of these offers, and make sure you look at other options so that you can make a decision that’s affordable for you.
Images: Shutterstock
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