What Does “Same as Cash” Mean?

A “same as cash” offer allows you to make a purchase with no interest for a set period, often three to six months. However, interest accrues during this time and is added to your balance if you don’t pay in full by the end of the promotional period.

According to recent data, the average interest rate that kicks in afterward is typically around 25% to 30%, making it crucial to understand the terms before accepting. Keep reading because we’ll explain how these offers work and the potential risks if you don’t pay off the balance on time.

What does “same as cash” mean?

Same-as-cash offers are special offers from retailers and contractors. On the surface, these offers—aka point-of-sale loans—promise no interest for a fixed period, but interest accrues on your balance. These costs can add up and make paying off your total balance more difficult.

You might get a same-as-cash financing offer if you buy a new couch or replace your water heater. The financing may be in-house or through the retailer or contractor, but certain companies may also have financing partners. 

This type of financing is often available to a range of borrowers, including those with limited or poor credit, but companies may have different rules about who can qualify.

What same-as-cash payments might look like

Imagine you opt to finance a $4,000 sectional sofa using a same-as-cash offer. To repay your total balance within six months, your monthly payments would be around $667.

Now, let’s say you were only able to repay $2,000 before the six-month deferred interest period ended, so your balance is $2,000 at the end of the deferred interest period. Once the regular rate of 25% kicks in, you decide to make $200 monthly payments.

Repaying your balance would take an additional 12 months, and you’d pay $266 in interest charges—not including back interest that accrued during your deferred-interest period. 

Pros and cons of same-as-cash financing

Pros

• Could help you avoid high upfront costs

• Smaller monthly payments may be more manageable

• Deferred interest periods can be long

• May help improve your credit with responsible repayment

Cons

• Interest charges can add up after no-interest period ends

• May have higher regular rates than other types of financing

• Length of deferred-interest period varies by company

• Could damage your credit if you’re unable to repay

How expensive is same-as-cash financing in the long run?

The cost of same-as-cash financing depends on how long your promotional period lasts and whether you can pay off the balance in time. Shorter terms, such as a 30-day same-as-cash or 60-day same-as-cash offer, may be less risky in terms of accumulating interest but require quick repayment. A 90-day same-as-cash offer provides a bit more flexibility, but you still must be disciplined to avoid interest charges.

A 12-month same-as-cash or 18-month same-as-cash offer can give you more time to pay but comes with higher potential costs if you can’t pay off the full balance before the promotional period ends due to interest accruing during the repayment period.

Example

Let’s say you finance a $5,000 appliance using a 12-month same-as-cash offer but can only repay $3,000 by the end of the promotional period. If the 25% interest rate kicks in, you’d owe back interest on the remaining $2,000, as well as on the initial $3,000 during the 12 months. This could result in hundreds of dollars in additional interest charges.

In contrast, a shorter 90-day same-as-cash offer would lower your potential interest costs because of the shorter period of accrued interest. Essentially, the longer the same-as-cash period, the greater the risk of paying more in interest if you don’t repay the balance on time.

Should you take a same-as-cash financing offer?

Taking a same-as-cash offer could make sense if you can afford to repay your balance before the deferred interest period expires. This type of financing can be helpful because it lets you repay a significant balance in smaller amounts over a set time. Just be sure to start repaying it right away. Waiting could result in high interest charges in the future. 

Alternatives to same-as-cash financing

Same-as-cash financing may not be the right option if you don’t think you can repay your balance in full by the end of the deferred interest period. You could end up with hefty interest charges due to the back interest on your balance. 

Check out the lower-interest financing alternatives in the table below, and click the option to view the companies we’ve researched.

Option	Best for
Personal loan	Lower rates and longer repayment terms
Cash advance app	Borrowing smaller amounts (often under $1,000) at no interest
0% credit card	Longer deferred interest period
Home equity line of credit (HELOC) or home equity loan	Larger purchases and lower rates

Here’s more about the costs of each alternative mentioned above:

• Personal loan: As of August 2024, the Federal Reserve reported two-year personal loans had an average rate of 12.33%—about half of the average rate of same-as-cash plans.
• Cash advance app: Cash advance apps offer a way to borrow smaller amounts at no interest—and if you’re willing to wait a day or two for the funds, you won’t even owe an instant transfer fee.
• 0% interest credit card: These credit cards work similarly to same-as-cash financing, but they may offer longer deferred interest periods, such as 12 or 18 months. Still, a 0% rate card tends to be desirable only if you can repay your entire balance before the end of the no-interest period. 
• Home equity line of credit (HELOC): With a HELOC, you draw from a credit line against your home equity. In October 2024, CBS News reported that the average HELOC rate was around 8.69%.
• Home equity loan: Home equity loans are disbursed as a lump sum, not a credit line. In October 2024, CBS News reported that the average rate home equity loan rate was around 8.36%.

FAQ

Should I take a same-as-cash offer if I can’t pay it off in full in the allotted time?

If you can’t pay off your balance by the end of your deferred interest period, same-as-cash is likely not your best option. Check whether one of the alternatives mentioned above is a better deal.

How does same-as-cash financing affect your credit?

When you apply for same-as-cash financing, you’ll undergo a hard credit check. This check can hurt your credit score by a few points. But if you make on-time monthly payments, ideally repaying your balance before the deferred-interest period ends, it could improve your credit score.