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Home / Understanding Beds / Interest Free Credit Mattresses & Exposed Beds – Why Not 0% Free Credit
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Interest Free Credit These three words are often given the look and feel of big, bold letters on sales signs by retailers – especially those offering mattresses and beds with free credit. Are you really getting a good deal when buying a bed to finance or pay the price for other people?
Updated 2021: With no deposit required, your customers are sure to see a bright ad campaign or two shouting ‘Buy Now, Pay Later’. It can be an attractive draw for those who are a little tight on money; But do we really understand how credit mattresses and interest-free beds work and what, if any, long-term value we get? Tempted by the 0% finance mattress offered by major retailers?
Could there be an interest free deal or are we all being duped by finance companies?
This article explains shocking hidden costs that all consumers can face when purchasing a mattress from a company that offers interest-free credit.
Brownies Mattress Direct
The purpose of the interest-free credit is to remove the doubt in the customer’s mind that they can now buy a new luxury item regardless of their financial situation or better judgment.
In fact, the total price that the customer agrees to pay is more expensive than what is estimated in the hidden loan price, so you invest in a deal that really isn’t a ‘bonkers bargain’.
In the example above, customers taking out loans for financial reasons pay £180 (15-20%) on top of what they have to pay directly. Since the cost of demand is effectively hidden, the customer does not understand this payment in the event of overcharging or reducing the quality of the mattress.
Worse still, customers who choose to pay £1,000 up front to buy a bed (and don’t need an IFC) still have to pay extra loan fees – even if they buy the bed outright. This person gets the most money imaginable! Try asking the retailer for a cash discount and we guarantee there is no option to avoid the £180 finance charge.
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This is the same with all interest free credit offers, curtains, kitchen, bathroom, the list goes on. Everything boils down to a simple sales strategy, the deal is often more attractive than the actual monetary value or quality of the product.
The first thing to remember when looking for a mattress on interest-free credit is that there is no such thing as free credit. You may feel confused by this, is it really free? Let’s see how the pricing structure hides this from your customers. The simple fact is that when you buy on credit, the total cost of your mattress has been added to the ‘interest charge’ by adding this to the retail price. For all whether they take credit or not.
Unfortunately, there is no such thing as a free lunch, and no financial service will give money without making a profit.
Interest-free credit is big business and finance companies offer customers 8-15% discounts when they choose. Whether you take out credit or not, these fees are always baked into your purchase price.
Luxury Mattresses & Beds Sale
The ins and outs of interest free credit (IFC) can be very confusing. So we share using a virtual retail mattress. The Super-Dream 1000 Pocket Sponge Mattress will be the example we see most often.
Say the mattress is advertised as a ‘Bank Holiday Bonkers Bargain’ at £1,000 (IFC) – 50% off the original £2,000 RRP. An incredible bargain, right? oh
Actually, the original £2,000 RRP is not a realistic target; This price is intentionally inflated. Retailers can list products in their silent auctions at these prices for one week before the price is cut in half across all their stores. A reduction of £1,000 is actually the price you expect to sell the product for.
Typically, retailers will mark up to 70% – and therefore usually sell mattresses for around £600-£800, factoring in production costs and all their overheads. The usual retail price for the Super-Dream 1000 Pocket Flash Mattress is around £246.
Natural Organic Latex Mattress Ii
Now suppose a customer chooses to buy a mattress using interest-free credit and agrees with the finance company to pay £1,000 after three years.
Of that £1,000, the finance company pays the retailer £820 and charges £180 (15-20%) for credit. This £180 is effectively a hidden fee for the loan and a small profit for the finance company.
Why the lowest? Failure to pay or late payment of even one payment means that the customer is responsible for paying up to 30% more in additional fees. In fact, some financial companies can work these missed payments into their metrics for profit margins, counting the number of people who miss payments and get penalized.
We have tried to offer interest free credit for two months without affecting our prices. Especially for customers who need a little extra help finding the perfect mattress. However, our testing results in an additional cost of up to 8%-15% for each mattress. We keep the same price without credit fees, but these fees make us unviable in the long run.
Nordli Bed Frame With Storage, White, 160×200 Cm
. Totally shocking and unethical. Instead of adding this fee of 8%-15% to the product price, we take it as a test. This unfairly affects all customers.
We were shocked when the finance provider told us to secretly raise the price to cover our costs!
That got us thinking about how much more it costs compared to other mattress retailers that offer interest-free credit. After 2 months we got rid of the interest free credit because it was really unstable. Interest-free credit has made us see a truly bleak world that we want no part of.
At John Ryan Design you deal with us and only us, no third party lenders or suppliers to add to the cost.
Solid Wood & Tatami Storage Beds + Anti Covid Coating
Instead of repeating all the usual mumbo jumbo sales, our military department offers instant discounts to customers with no credit agreement. All costs are up front, there is nothing hidden, and you should have worries with your new bed.
If you are in the market for a new bed, even if there is nothing fancy about it, we strongly recommend that you shop around independent retailers that do not offer interest-free credit because the price you pay should be value for money. Below are helpful guidelines to show you what to expect at various price points when shopping for a new mattress. Parts, fabric and spring parts are all based on not receiving free credit. If you’re buying on credit, you’ll need to subtract the mattress’s specs at each budget point to account for hidden costs.
When you choose interest-free credit, you pay it. If you don’t use it, you’re going to pay for it. In our experience, it’s better to spend your hard-earned money on what’s inside the mattress than on a financing deal that compromises the quality of the mattress you’re buying.
The helpful guide below will show you what to expect for your budget when shopping for a bed with no interest credit. If you shop with interest-free credit, you can deduct up to 15% of your budget from your mattress.
Ubi Warehouse Sale Has Over 1,000 Mattress And Storage Beds To Clear, Price Starts From S$199
It won’t get you much better than a 13.5 gauge roll/open cage with a thin polyester cover or a firm foam mattress.
The beginning of the pocket part of the basic springs with a count of 800 – 1000. There is no filler except foam and composite material. Two-sided model.
We do not offer or use interest free loan companies. Instead of relying on interest-free credit that you pay through the nose, we offer our clearance mattress model to make the most of your hard earned money.
Need more information before deciding on your next bed? Head over to the Bed Understanding section for everything you need to know about beds, mattresses, bases and headboards.
Emma Original Memory Foam Mattress, Medium Tension, King Size
Why not call our small friendly team who can help make recommendations based on your budget.
