Benefits Of Same As Cash For Customers

2019/02/25

A customer purchases goods for cash or through other means like credit card and debit card. In case of companies payments are generally made through check. Vendors may offer credit period to their customers.

Credit period is the period within which payment is required to be made by the customer to the vendor. This payment term might be agreed at the time of signing the contract. Here, goods are sold to the customer but money is not received instantly.

Meaning of Same As Cash

“Same as Cash” is a kind of credit tool used by retailers to attract customers. They may offer a specific period within which payment for the procured item can be made by the buyer.

However, there is a provision that if payment is not made within the specified period, customer will be charged interest after the expiry of the specified period.

For Instance, a retailer selling electronic items may offer a scheme of “60 days same as cash” on purchase of television. A customer interested in buying a television can make the payment within 60 days without any need to pay any amount at the time of purchase.

Since, no interest is charged for the period of 60 days, whenever payment is made, it will be of the same amount as at the time of purchase. 60 days Same as Cash can also be called as 60 days net.

In case of business transactions, vendor may not ask for any interest payment from the company in order to establish long term relationship with the company.

Do I Need To Make A Single Payment Under This Scheme?

Any customer availing this scheme can make multiple payments. It is not necessary to make a single lump sum payment. However, there is a possibility that if some amount remains to be paid after the expiry of interest free period, retailer may charge interest on the whole amount.

For Instance, a customer has purchased a television for $ 2,000 on 60 days Same as Cash basis. Customer makes a payment of $ 1,500 (in two equal installments of $ 750) to the retailer. At the end of 60 days from the date of purchase, payment of $ 500 is still required to be made by the customer.

Here, the retailer may charge interest on the whole amount of $ 2,000 (cost of television) and not on the remaining amount of $ 500. Hence, it is very important for the buyer to estimate the time he/she will require to make the complete payment before entering into any such transaction.

Is It Advisable To Buy Under This Scheme?

Same as Cash works like a short term loan whereby the retailer extends loan to you in a non monetary form, that is, he/she allows you to purchase the product without making any payment at the time of purchase.

Though everything may appear to be attractive, it is advisable to check the terms and conditions on which such a benefit is offered. Further any purchase under this kind of a scheme may affect your credit scoring in case payment is not made in time.

Photo credit: quickloanfunding.net

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