What is interest?

Question

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So at the beginning of Summer break, someone i knew said that i should get a computer instead of a camcorder. Well, I don't need a camcorder since i have 2 of them (one is my dad's, which i can use whenever). And he said I should get "something cool like a mac". Like I always thought they were like the worst things ever. So I just looked up online about them from the beginning of summer break to today. And I've made the decision of getting a macbook. It's $1300. $31 a month. So I click "Juniper Visa Card".

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Ok so that's the story.

"Now you can order the Mac system of your dreams, your favorite iPod, or anything else from the Apple Store today and pay no interest on your purchase for up to 90 days."

~From Apple~

Like does it mean I don't have to start paying until 90 days or any day under? Please help me. I really need a new computer.

SOURCES:

http://store.apple.com/1-800-MY-APPLE/WebObjects/AppleStore.woa/wa/RSLID?sf=wHF2F2PHCCCX72KDY&nnmm=ucred

Answer 1

When you borrow money from somebody, they want more money back from you in return. The money you pay to borrow money is interest. If you borrow $100, and the interest is 10%, then if you don't pay for the first year you will owe $110 to whomever you borrowed the money from.

90 Days no interest means just that, you wont pay interest on the  money you owe for the first 90 days, so it is like borrowing money free for the first 90 days. After that you will start to pay interest on the money you borrowed.

Check the interest rate, anything over 12% usually isn't that good if you have good credit. But if you have no credit then you will pay upwards of 20% per year (known as the APR, or annual percentage rate).

You have to make monthly payments, usually there is a lower limit (and sometimes there is an upper limit to what you can pay, or a premium for early retierment of the debt {paying it off}).

Go to your bank where you have a checking account or savings account, and ask about loans for computers, many banks offer them and they will be better rates than on a credit card, and will cost you less over the life of your debt.

Hope this helps.