Is 0% financing really free money?
True 0% financing can mean no interest during the promotional period, but “no interest if paid in full” may be deferred interest with very different consequences.
Key points
No promo-period interest; post-promo interest applies to remaining balance
Retroactive interest may be charged if not paid in full
Often not enough to finish by the promotional deadline
The phrase that changes everything
CFPB distinguishes a true 0% promotional APR from deferred-interest language such as “no interest if paid in full.” They can sound almost identical at checkout but behave very differently at the deadline.
The payment trap
A lender can set a minimum payment that keeps the account current without paying the promotional purchase off before the offer expires. If the goal is to avoid interest, the relevant monthly number is purchase balance divided by the number of promotional months, adjusted for any other charges.
It is still debt
Zero interest does not make the purchase cheaper by itself. It changes financing cost. The purchase still occupies future cash flow, and late payments or other terms can affect the promotion depending on the agreement.
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