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Debt Advice Handbook 14th edition

Interest-free credit
This is a type of credit sale agreement in which money is loaned to buy goods without any interest being charged. It is usually offered by larger stores. Some agreements offer interest-free credit provided the total balance is paid off within a specified period and, thereafter, become ordinary credit sale agreements.
The legal position
These agreements are regulated credit agreements, provided the credit is for no more than £25,000 (if made before 6 April 2008) or £15,000 (if made before 1 May 1998), even though there is no charge for credit. If the agreement was made on or after 6 April 2008, the agreement is regulated regardless of the amount, unless it is exempt (see here).
An agreement is exempt if it requires the credit to be repaid in no more than four instalments within 12 months of making the agreement, and in the case of agreements made on or after 1 February 2011, the credit is provided without interest or other significant charges. An agreement made on or after 18 March 2015 is exempt if the number of instalments to be paid by the borrower is no more than 12. However, if it is not exempt, it must contain all the details required by a regulated agreement (see here) and details of the circumstances in which interest could become chargeable. Interest can be charged on late payments if the agreement contains a clause allowing it. This type of credit can be expensive if it is not repaid during the interest-free period.
Special features
Interest-free credit is offered as an inducement to buy particular goods in a particular place and, therefore, is a linked agreement (see here).
Checklist for action
Advisers should take the following action.
    Check liability, including enforceability under the Consumer Credit Act 1974.
    Check that the goods purchased were as described and of satisfactory quality (see here).
    Assist the client to choose a strategy from Chapter 9, as this is a non-priority debt.