We prefer to pay all at once a few days before final payment is due. I get leery of a missed payment or crediting error occurring... either at thier fault or ours.
Plus the time value on the funds CAN amount to something. If you get 3.47% on the funds (as suggested to be among the highest for 1 year CDs by
http://www.bankrate.com/brm/rate/deposits_home.asp )... and if you could get 3.04% for 6 months .... and if you had $5000 potentially in a quad window on a 7 nite sailing.... the $4000 balance with 3.47% would be $138 on the 1st year .... then you would have $4,264.62.... or a $264.62 profit .... IF you were ready to pay in full up front and you booked 18 months out when rates are generally available initially. Of course, this $264 is pretax money - and this assumes you took 18 months - when generally you have to pay in full 75 days before embarkation - so with an 18 month advance booking you really have more like 15.5 months.... however I'm suggesting the minimum value of holding the funds for the 18 month period period to sailing.
The $264 may seem inconsequential - however, how would you like a couple FREE Palo Dinners for 2 ($60), plus a FREE $100 shuuters package of photos and a $104 spa credit? Alternatively, how about reducing the recommended gratuities due on a 7 niter from $76.25 for each member of your quad cabin by $66? to just $10.25 per person? THAT would be the effect of holding the full $4000 balance due from the earliest initial booking moment to embarkation day.
SO.... you choose how you would like to approach it. Even if you paid regularly to a money market fund at ... say, HSBC Direct out of NY (
http://www.bankrate.com/brm/rate/mmmf_highratehome.asp?params=US,416&product=33 ) you'd have a current rate of 3.45% (better than a 6 mo CD).... however, there might be minimum balance requirements or other annoying rules tocomply with.
At any rate - lets' just assume you can get the ETRADE 3.25% rate on money market balances. If you owed Disney $4000 in 15 months... then divide $4000 by 15 = monthly payments of $266.66. That 1st monthly payment of $266.66 would earn an ASSUMED 3.25% rate for 15 months which by my unaudited calculation suggests is worth $279.05 in 15 months. Thats' proceeds of $12.39 on that one month... and each of the next 14 payments will earn less.... down to as little as $0.72 for that 15th payment for the ONE month of interest. Taken as asimple AVERAGE earnings .... suggests the average earnings is $6.56 a month over 15 payments.... or SIMPLE average expected proceeds of $98.40.
SO if you would NEVER pay in full on initial booking 15.5 months out - and you'd normally make 15 equal payments ... and if you would only use ETRADE for a Money Market yield that's currently 3.25%... this opportunity cost of paying Disney versus writing a regular check to ETRADE is $98.40.... before income taxes.
Now this might not seem like much... however with 875 cabins... if we ASSUMED the average were more like $6,000 per cabin and $5000 due... than 875 x 1.25 x $98.40 = $107,625! With one sailing per week.... assuming for conservative simplicity 50 weeks .... $5,381,250 in the TIME VALUE of money INCREMENTALLY paid up front versus all of the balance due paid near the 75 day due date!
I double checked all figures.... but I've been known to make mistakes.... ask my wife as she remembers EVERY mistake I've ever made in the 24 years we've been together!
< wink >