Same as cash, at least for now

Retailers now have to rethink how they finance big ticket items such as appliances, furniture and jewelry or at least what they disclose to the consumer. Claims of "no interest" or "no payments for 12 months" may soon have additional disclosures or even be stopped entirely. Anyone who has taken out one of these loans knows that there is an interest rate but the interest is waived when the loan is paid early, and if not the interest is charged back to the original date of sale. Retailers often pay a percentage of the sales price to the finance companies to offer these loans. The Federal Reserve has proposed a rule change about how these loans will be promoted. Although the rule change will not take effect until July, 2010, retailers will change their promotions ahead of that date. In April, the Federal Reserve will clarify the effect of the rule.