Borrowing with smarts (part 8)

Purchasing Major Appliances

When it comes to major appliances, many times they break and then we realize that we have to buy a replacement. A better way to go about your impending appliance debt is to plan ahead. If you have a ten year old washer and dryer set, you know you will need to replace them soon. If you are trying to pull out of debt, you should start building an emergency fund as early in your debt recovery stage as possible. Even if you are not overwhelmed with debt and you do not want o assume much debt, still plan way ahead for appliance needs. Having an adequate emergency fund should allow you to replace appliances that are beyond repair, easily and without borrowing. Once your other debt is under control, you can repay the emergency fund over just a few months.

Large department stores that sell major appliances often offer special incentives several times a year for customers to purchase major appliances. The incentives include things like deferred payments and or deferred interest. Usually, you need to use the department store’s credit card to make use of these incentives.

These incentives can be good deals but there a few things we want to you consider before you get into one of these. If you cannot do the proper research and make up your mind in the short time that the incentive is going on, do not rush and make a hasty decision. These incentives are offered on a very regular basis at one place or another.

If you are trying to stay debt free, it is the best idea for you to not get another credit card to add to your collection just because you want to take advantage of deferred payment and such. Even though the payments and or interest is deferred, it is still debt that shows on your credit report. So be aware. Never become the buyer who thinks they will get the card, defer the payments, and pay the entire bill before the payments and interest kicks in. This hardly ever works. In the mean time, many things may pop up in your financial life that could cause you to not be able to follow through with your plan to pay off the balance before interest sets in.

If you do not pay the amount in full before the interest kicks in, many times the interest will kick back to the date of purchase – not the date the first bill is due. Just be aware of all of this and understand the details of these types of incentives before you jump right in.

Do not purchase an appliance in response to incentives unless it is exactly what you want. Make sure that you do your research on appliances and do comparison shopping ahead of time. You always want to be absolutely certain that you are getting the best overall deal. Just like you want to research your car before you buy one, you will also want to do the same when shopping for major appliances. In addition to the cost of a new appliance, consider its life expectancy and the costs to operate it over the years to come.

Recap for borrowing with smarts

Whether your next loan is for an automobile, a wedding, a new home, or your child’s college tuition, living debt free does not necessarily mean never incurring another debt. But living out from under the burden of debt means having a plan to pay debt off, be disciplined about paying as you had planned, and making sure you get the very most for your money. It also means accumulating an emergency fund so that every little bump in your game plan does not throw you back in the debt cycle.  

(636)

Back to News Updates