Promotional credit plans provide you with a way to make a needed purchase immediately while offering you the advantage of payment flexibility for auto repairs— potentially without interest. As a financial option, a credit plan can be a great way to make a big ticket auto repair manageable.

How promotional credit plans work

Many promotional credit plans require you to make a minimum purchase to enjoy either a no interest or deferred interest benefit. That benefit is coupled with a delay period-- the standard period of time you are given to pay off the balance in full. Delay periods typically range from six months to a year. Failing to pay off your balance at the end of the delay period means you may incur a penalty or be on the hook for interest charges that accrued during that period of time.

Deferred interest versus no interest

Promotional credit plans come with either deferred interest or no-interest terms. It’s very important to understand the differences because they are major. A no interest or zero interest plan is exactly as it sounds, meaning that even if there is an unpaid balance at the end of a delay period, accrued interest will not be applied to your account.

Unlike a no-interest financing plan, a deferred interest plan requires you to fulfill two major criteria to successfully utilize the credit plan's terms and avoid interest charges. First, you must make the required minimum monthly payments each month. Second, you must pay off the promotional purchase balance by the time the delay period ends, so that your account will not be charged interest that accrued during that time.

How to apply for a promotional credit plan

Before applying for a promotional credit plan, be sure to understand the exact terms of the financing program. You’ll want to make sure you fully understand the promotional interest delay period, monthly minimum payment requirements, and penalty for failing to make a minimum payment or adhere to the terms.

Getting approved for a promotional credit plan can be a financial lifesaver when it comes to paying for major automobile purchases and emergency expenses. To learn more about promotional credit plans and financing for automotive repairs, check out Credit First National Association’s education page.