Credit Financing: Buy Now Pay Later (Superbowl Edition)

Financing purchases on credit cards can lead to financial ruin, but some deals are worse than others. “Buy Now - Pay Later” takes on a whole new meaning when it comes to disguised sales from a rent to own company. A sense of urgency can cause people to make some bad decisions, and on Superbowl Sunday, it seems appropriate to remind sports fans of the cost of being a sports fan who wants a nice TV now.

Of course, this applies to anyone who feels that they need something right away. Rent to own companies tend to rent/sell items that are used daily, are a part of peoples’ everyday lives, and are really hard to do without. In a fraction of the time it would take to pay off the rented item, if you can put off a purchase for a few months you could save up and pay cash for the same item, or keep saving for a much nicer one.

It may seem impossible to go without a nice TV - or a sofa, bed, table or a washer / dryer - but it isn’t. It is terribly inconvenient to be without some items, but most of these are not a true necessity. At least these items are not something that needs immediate high quality replacement if you are without one. Almost any of these items could be bought used for a very small amount of money, and while it may not be the newest technology, brand new or beautiful, you can get something that will hold you for a while. Someone might need a bed, but an inexpensive mattress on the floor will hold you for a while while money for a nice bed frame is saved up.

For example, if someone were to buy a TV at a pawn shop or a yard sale, they might get a small set for under $50. 00. If they were to save $50.00 - $100.00 per month for the next few months, they could buy a nice TV for about $400.00 cash. The same $400.00 TV bought through a rent to own company might cost about $900.00 paid in installments of about $109.00 per month.

See also: Bankruptcy Law Network: Causes Of Bankruptcy: Snowballing Debt And Interest Charges February 3, 2008 by Susanne Robicsek

See also: New York Times Article February 2, 2008: For Just a Few Dollars, a Big TV and Years of Debt By JIM DWYER