If you live in the Chicago area, you’re probably quite familiar with The Room Place furniture stores. They have good deals, but is their credit card one of them?
I saw that at the top of their website and it intrigued me, but what’s the catch?
7 financing offers, 2 of which are uber-risky
As you would expect, the “up to 5 years” of financing will only apply for the largest purchases. In addition to that, The Room Place has 6 other financing offers.
With no minimum purchase required:
- 6 month financing with 0% interest and no down payment.
- 18 months equal pay financing with 10.99% APR, and no down payment.
With minimum purchase of $1,500 or more:
- 12 month financing with 0% interest and no down payment.
- 24 month equal pay financing with 10.99% APR and no down payment.
- 36 months equal pay financing with 10.99% APR and no down payment.
With minimum purchase of $2,000 or more:
- 48 months equal pay financing with 10.99% APR, and 10% down payment.
With minimum purchase of $3,000 or more:
- 60 months equal pay financing with 10.99% APR, and 10% down payment.
Of course, the last on the list is the only one that let’s you stretch out payments over 5 years.
Two of these plans you should avoid at all costs! Which are they? The 6 months at 0% and 12 months at 0% offers.
So why on earth should you avoid zero percent?! Because it doesn’t work like the 0% offers do on regular credit cards. If you look at the fine print on the The Room Place card application you will see this (the highlight is added by me):
See that? You need to pay it all off within the 6 or 12 months. When you don’t, they charge it going back to day one. With the standard variable APR of 24.99% to a fixed APR of 28.99%, whatever interest rate you get within that range is a losing proposition!
And the other 5 financing offers?
The good news is that these other 5 offers won’t do back interest. So if you’re going to use The Room Place credit card, opt for 1 of those 5.
They do have a downside though. None of these 5 have 0%. Instead they charge you 10.99%. Granted, that is a reasonable APR to pay, but if you’re financing your furniture over 5 years, that will make your total cost significantly more expensive.
Do you want an account?
If you have bad credit – like a credit score in the 600’s – then Room Place will be the way to go. At least on your first try.
Why? Because like most store credit cards, the requirements for approval aren’t too hard to meet.
Plus if you’re spending thousands of dollars on a bedroom and living room set, it will be hard to get that high or a credit limit elsewhere if your credit history is sketchy.
But if you have fair or good credit you may want to stick with a major card from a bank that has 0%. I say this because they won’t ever charge back interest like Room Place credit card does.
Do you already have an account?
If you already have a Room Place account and are using one of their 0% offers, be careful. Make sure you can pay it off entirely before the 0% expires and back interest is charged.
However if you have 1 of their other 5 offers, you won’t have to worry about getting hit with back interest. But the 10.99% APR is only growing your debt, so you may want to do a balance transfer with the remaining amount you owe.
This review was written or last updated July 24, 2013