Is the Mattress Firm credit card too good to be true?

Furniture stores are known for having 0% offers, but is there a catch behind Mattress Firm’s financing?

financing 'til 2016When you hear “0% ‘til 2016” it sounds impressive, considering that right now is only summer of 2013. But as is the case with most things in life, if they sound too good to be true, they might be.

With Mattress Firm, not all of the 0% promotions are a bad deal. But some of them do come with a catch that you need to be aware of, especially if you already have a credit card account with them.

For starters, the good news is that their lending is managed through Wells Fargo. They’re a respectable bank that is a lot better than companies like GE Capital and Comenity, who manage most store cards you see.

Now for the bad news… not all of the Mattress Firm credit card offers are your typical 0%. Some are “no interest” which involves deferred interest.

Version 1: “Equal Payments” option

Here’s the fine print on this one, copy pasted directly from the card application with the blue highlight added by me…

how equal payments work

Translation? Each month you make equal payments. If you stick to them, you will be paying off the mattress (and box springs or whatever else) within the interest-free window. This is the best version, the one you want to go with.

Version 2: “No Interest Option”

This may sound similar to the “equal payments” but it’s totally different.

no interest option terms

As you see, you get charged the interest retroactively (the “deferred interest”) if you don’t pay it off by the end of the special terms period.

If that happens, you’re worse off than when you started because now you will owe interest at a rate of 27.99%, with the calculation starting on the first day you bought your mattress.

Version 3: Regular interest

This happens when you make purchases that do not qualify for special financing. If that’s the case, you will be paying the 27.99% APR no matter what.

27% APR

That is a terrible deal!

Whatever the case, don’t be fooled…

Not to pick on Mattress Firm stores, because all furniture stores use this clever marketing strategy.

They advertise you will get something like “0% ‘til 2016” and it sounds like it’s a long ways away. But they almost always run it until January 1st of that year.

So while it sounds like a long ways off, it’s not quite as long as you may think.

A more accurate way to think of it is getting it until the last day of the year before (like Dec. 31st 2015). If I bought something on June 30, 2013 that means I’m getting 2.5 years.

Is 2.5 years a long time? Yes, but when you hear 2016 it sounds further in the future than that.

If you currently have the credit card from Mattress Firm with a “no interest option” that uses deferred financing, make sure you either:

(a) Definitely pay it off within the special terms window
(b) Before the window runs out, apply for a new 0% credit card and move the debt over to it. That way you will avoid the possible retroactive interest charges from Mattress Firm.

This article was written or last updated June 15, 2013

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