Quote:
Originally Posted by pyroguy
Why would interest be sitting in reserve if you have a zero interest loan? That doesn't make any sense.
As for your cash back idea, you're more likely to spend more using a credit card than you are with cash, check, or even debit card. Significant enough that the money you're "making" or "earning" you've anyway spent on random other...
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What the lender does it lend at interest free. They calculate the interest but do not apply it to the loan unless the borrower misses a monthly payment. If that occurs then they add the interest into the pay back. I have three such loans and I make the payments on time so I pay no interest. It is interest free borrowed money in that regard.