Buying basses with credit [poll]

[mrperkolator]

So, I don't know if this has been answered (I immediately started replying to your comment when I saw it in the thread), but the truth is... people who are diligent about how they utilize credit cards can, in fact, profit on them.

Similar to the way insurance companies work by hedging their bets that the majority of people won't get sick... credit card companies hedge their bets that the majority of folks will: a) carry a balance and pay high interest, b) miss payments and have to pay fees, c) generally not utilize their rewards programs well. Look up credit card churning sometime. There are people that make, literally, thousands of dollars or earn millions and millions of rewards miles by gaming the system that credit card companies have in place.

For every person that plays their cards right when it comes to credit cards, there are a handful of people that totally mess up and end up spending hundreds, if not thousands, in fees.

Read my other replies. We're talking past each other. I'm pointing out that the company has to pay for those rewards somehow, otherwise they go out of business. We call them a business and not a charity. somehow they are generating revenue to cover those rewards. And as I mentioned before, it's wise to read the fine print and your statements to figure out how the company is generating the revenue used for those rewards. If you can make it work, then great!

It very well may be the companies hedging their bets. Either way they will not do it without financial motivation.

 

[Papazita]

I don't buy gear that I can't afford to pay for up front in cash, however I will from time to time put something on a card and pay it off it in 2 or 3 months, just to keep that credit line open and active and showing as a positive on my credit history. Otherwise, my cards will almost never get used.. I'll pay interest for a couple months for the benefit of maintaining my credit score.

 

[DJ Bebop]

I did two purchases from Sweetwater on their 36 months deal. One for my WD 800 and after that, a Zoom R20. Both paid before the allotted time.

 

[mcrawfordmusic]

I'll sometimes use Afterpay to stretch the payments out across a couple of pay days.

The old adage is you can't pay for something twice over, you can't afford it.

 

[MrClassicMetal]

Read my other replies. We're talking past each other. I'm pointing out that the company has to pay for those rewards somehow, otherwise they go out of business. We call them a business and not a charity. somehow they are generating revenue to cover those rewards.

Right on, that's exactly how it is.

That cash back is nothing to those companies. It's just a small portion of the massive profits those CC companies are making, and it's a small investment to entice people to use their product. That's all there is to it.

Basically it's money generated by people who often can't make their monthly payments and are paying the hefty fees.

And those cash back rewards are not exactly a way to make money anyway, that's what the CC companies want you to think. The guys in that video I posted in my earlier post explain how that works. Basically you'd have to spend more than $25,000 to get a few hundred back. There are better investments than that, if you can even call those few dollars you get from CC cash back an "investment".

And as I mentioned before, it's wise to read the fine print and your statements to figure out how the company is generating the revenue used for those rewards. If you can make it work, then great!

It very well may be the companies hedging their bets. Either way they will not do it without financial motivation.

They are like casinos, and the house always wins.

The fact remains that the majority of people spend more when they use plastic, even though they claim that they are only "buying things they were going to buy anyway". That's just self-delusion. People are prone to spend more with a CC, it's a psychological thing; when they aren't holding the actual money in their hands it's much easier to spend it. And this is how people get in debt.

 

[brianrost]

I use credit cards for purchases from dealers and cash for private sellers (doh) but I pay off the full card balance every month. In other words, if I don't have the money I wait until I do.

 

[mrperkolator]

Right on, that's exactly how it is.

They are like casinos, and the house always wins.

We are still talking past each other. While your information is great, it's not where I was going.

For a business to work:
Profit = Revenue - fixed cost - variable cost

This is really all I'm trying to say. No profit, no business. We, as customers, should read and understand conditions on card. As some others have said, CC companies are betting the customer does not read/understand everything. A business is ultimately out to make a profit, not out to be nice. If being nice brings them more profit, then they will be nice. As you put it, "The house always wins."

 

[Michael Stanley 2112]

Someone mentioned "Sweetwater" ...

I could buy things on credit, but as the old adage (I'm sure someone posted it, but I'm not reading through the whole thread) goes: "If you can't pull the money out of your pocket ..."

Sweetwater does have a nice little service they provide, though. I can call me sales engineer and tell him to take X amount of dollars off my (music savings account) card and they will hold onto that money against a future purchase.

The only hitch is: that money is like "store credit". I can never get it back, but it's a nice way of putting money away; like a lay-away account.

 

[defdog99]

Store cards!
0% interest and you get 5% or 8% or 16% off the purchase, and THEN 5% or 8% or 16^ off your NEXT purchase.

So buy a $1000 bass and essentially get $50 off now and $50 off later and 6-48 months 0% financing.

 

[Element Zero]

My answer is credit card unless the maker only accepts cash.

But two things:
1) I always pay off my entire credit card balance every month, so there is no interest.
2) My credit card among other things gives me cash back and insures my purchase for no additional fee.

Unless someone is just really bad at over extending their credit, I don't know why you would pay with cash ever.

Yup. We have 2 cards. One never gets used, and the other gets used for everything and we lay the balance off each month. Cash back on gas, food, and online purchases. Get back nearly 2k each year. Why not get free money for spending money on things you’re already gonna spend money on?

 

[Indiana Mike]

Credit cards are fine, if you can pay it off every month.

I use one with cash back. I buy everything with it. A discount is a discount and it adds up , especially over a decade. I pay it off weekly.

 

[JW56789]

'What's in YOUR wallet?'

After our bankruptcy, my previous wife signed us up for four $300 limit credit cards from C****** **e. Since you just emerged from bankruptcy, they shower you with new cards to rebuild your credit! I was out on the road for three months and damn near died when I came home and she told me.

You have to understand they LOVE this business: Your credit rating is zilch, so they can charge you interest rates that would make a Mafiosi blush, saddle with every fee in the world, and make a killing on your misery so you can rebuild your credit!

Several years later, she is diagnosed with inoperable cancer. I call C****** **e and beg them to consolidate the four accounts into one, all of our money is going to her care. Ain't happening.

She succumbs to the cancer after 18 months. After the dust settles, I call C****** **e to close the accounts, I'll clear the balances from the life insurance. They tell me there has to be one month with no activity before they can do that. Fine. Cut the cards up, wait a month, call them back.

Can't close the accounts. Each of the four has a five-dollar balance. How is that possible, there's no one with access except me, and I've not used them. Well, well, well . . .

Remember all those fees? Come to find out there is a 'Monthly Inactivity Fee' of, you guessed it, five bucks. In perpetuity, for all practical purposes. I . . . . completely . . . . . went . . . . . crazy.

Somehow, I remembered that C****** **e was headquartered in NJ. Called that HQ, and was miraculously put through to a VP who heard my story, said 'Mr. Wilson, we don't need your money that way', and sent a letter releasing me from any and all debt with C****** **e, paid in full, the next day via overnight FedEx.

If I had to starve to death, die an ugly death, or get eaten alive by any number of vicious predators, I'd do that before I EVER, EVER sign up for a credit card again.

So whenever you hear 'What's in YOUR wallet', you better think long and hard about it.

 

[BucketOfFish]

"I own it. It doesn't own me."

 

[Herrick]

I almost always pay with a credit card, then pay that off in few days or whatever.

 

[2F/2F]

I have done all of the above. I usually go for debit (or cash locally), or a 0 percent, or otherwise very low interest, situation.

Unless someone is just really bad at over extending their credit, I don't know why you would pay with cash ever.

Deals. Often rather sizable ones. Sellers love getting cash in person. I use cold-hard cash in person whenever possible, and whenever safe (i.e. when I can see the item with my own eyes and know that it's Kosher). I can't tell you how many 20–40 percent discounts off of already-fair Reverb prices that I have obtained by noticing that the seller is local, and transacting in person with cash, at a police station.

 

[fdeck]

But how much extra are you paying in intrest, fees, etc. for each transaction? (for privacy reasons dont answer!)

In general, businesses would not stay in business by giving their customers more than they make. So I'd take a bet you're giving them $2k in fees/interest. I don't know your specifics, I'm just talking from general knowledge of how a balance sheet works. I could be wrong.

The merchant pays the fees. In turn, the bank transfers some of that money to the customer. The purchase price covers the credit card transaction fee.

 

[wysiwyg248]

My options: Credit card and pay full balance religiously or Paypal credit with % interest.
If buying in person, cash is king as you can negociate discounts. If buying from overseas, check pricing of merchandise less VAT which can be from 10 to 20% off depending on the country. As an alternative option, contact the seller to offer a wire tranfer isntead of Paypal for ex. and split the fees (almost 5% for transactions abroad).

 

[Nakoatron]

I’m all about financing if you’re responsible with it. I prefer to pay in cash, but I’ll take advantage of a good 0% deal from time to time.

 

[N4860]

As others have said, I opt to use the 0% interest credit and just pay it off on time to avoid any interest. I have more than enough in my savings to pay with cash but why bother using your cash to buy a bass when you could invest it and earn more from your money? I could go out and pay off my mortgage if I wanted to but my mortgage rate is like 1.49% so I'd be better off investing my money and earning more than 1.49% on my own interest and just paying the mortgage payments every 2 weeks.

 

[BadSanta1281]

In the car business I was looking at customer credit reports every day.

Scary how many people try to add more debt to their mountain of debt.

Avoid debt. Retire early.