A Plea for Credit and Financial Education

A friend of mine recently did the math on a consumer financing “deal” offered by Future Shop:

The flyer advertises “No Payments, No Interest” for a period up to 18 months. The fine print at the back explains that there is a graduated “administration fee” that increases depending on the length of the “no interest” term. For a $299 purchase utilising the 18 month “No Payments, No Interest” option, the Administration Fee is $99.99. Funny enough, annualized, that is equivalent to more than 22% interest/year. This gets better.