With the current American financial melt down (of which Washington Mutual was the latest victim), there’s a chance we may be in for some rough times ahead.  Many credit card companies have already raised monthly minimum payments and they’re increasingly credit is becoming less available in the market.

Personally, my family strives to live as debt free as possible carrying no revolving debt with one exception; 0% financing with no payments.

The catch to the no payment, 0% financing plans is the balance must be paid in full by the end of the promotion date. If not, you’re often subject to paying the back interest on the purchase. When taking advantage these scenarios, why not pay yourself a little interest?

If you don’t have an interest bearing savings account, open one.  I’ve used www.bankrate.com in the past to see who’s offering the best rates.  Take your total balance divided by the number of months of the plan.  For example, if financing $1000 at 12 months would be $83.33. Every month when you get your bill, deposit the monthly figure we just discussed into the interest bearing savings account. When you receive the final statement prior to the special financing expiration, take the money you deposited into your savings account and pay off the entire balance.

Based on our $1000 example, let’s look at how much you saved.  If you make no payments for the special finance period, let's say your APR adjusts to 18%.  Using a simple compound interest calculator, you will then owe $1,195.62…and you haven’t even made a payment yet!  Making a monthly deposit of the $83.33 into a savings account earning 3% interest and you’ll have earned $16.40 over the same period and cleared that debt before paying a single penny of interest.