3 Things You Definitely Shouldn't Finance
You really want a new TV to replace the model that currently graces your living room, so you stroll down to the store of your choice and plop down your credit card. Or your washing machine is making strange noises, so you decide to pick up a new model courtesy of in-store financing. That may be the American way of life, but if this is how you make big-ticket purchases, your lifestyle is costing you a bundle in fees and interest. When it comes to the following items, paying cash is the way to go.
Everyone gets financing for appliances, right? Why, most appliance stores will give you no-interest financing! So why not take them up on the offer?
There are a couple of problems with those enticing no-interest financing offers you'll find just about everywhere. First, these offers require a hard credit check to qualify. And a hard credit check can drop your credit score by a couple of points. This isn't a major factor for most people, but if you happen to be on the verge of applying for some major credit such as a mortgage, those few points can end up costing you hundreds or even thousands of dollars by bumping up your interest rate on the loan. Second, you'll need to check the fine print carefully to make sure that the financing doesn't come bundled with a side of fees. And third, failing to pay off the financing before it expires will cost you far more than you would think.
Source: Fool.com
