Buying basses with credit [poll]

[CoffeeLove]

Cash, always

 

[g-dude]

I have couple of friends working in banks, I took their advice long time ago: to stay away from credit card debt. All purchases I make are for cash.

Two points:

1) If there is free 0% financing, you are already paying for that benefit, even if you pay cash.

2) If they accept credit cards, you are paying for that as well, even if you pay cash.


Frankly, you are better off using a card, or free financing, even if you have the money on hand.

Take that money and invest it - whether it is in a CD or stocks if you have 0% financing. Otherwise, use a card that provides benefits and pay it off each month to build a credit history and get cash back or some other perk.

 

[g-dude]

Why would you want to improve your credit score? A high FICO score simply means that you've borrowed a lot of money. This is what the banks want you to do, so they can make money off of you.

I’m sorry, but this is the single most incorrect thing I’ve read all day.

You can have a high FICO score without “borrowing a lot of money”, and in fact a thin credit file will hurt you when you are underwritten for a mortgage.

Having a high FICO score means you pay dramatically less in interest on any purchase of substance - like a home or a car. It also means that you have more flexibility in terms of what you can get credit for, as a high credit score can offset layered risk.

Please don’t spew misinformation. There’s enough questionable info out there that is relatively harmless, but this sort of thing can actually mess with someone else’s financial health, which isn’t cool.

 

[g-dude]

Uhh, with today's inflation, it's pretty dumb not to take advantage of the no-interest 24, 36 or 48 month payment options you can get from the big music stores. Money will be worth less at the end of the period. You might feel like a smart buyer by paying it off all at once, but it is actually giving away money.

If this concept doesn't make sense, think of it this way.

Let's say your monthly payment on a no-interest payment plan is the same as the current cost of a gallon of milk (~$5).
Let's say due to inflation, the cost of a gallon of milk doubles over the 4 year period. That means the last payment you make only has the value of half a gallon of milk.

So if you pay it now, you are paying the cost of 48 gallons of milk. If you pay it off over 48 months, it will be the equivalent to 36 gallons of milk (after doing the math).

Inflation won't be that high of course, but the concept applies. Those no-interest payoff plans are free money to you.

The Sweetwater one is done by the Synchrony bank. Their account website is extremely easy to use. They do auto-pay but I log in every month and schedule a payment ahead of the auto-pay, just to make sure there are no issues with my bank connection. Easy to use and will save you a ton of $. Guitar Center, Sam Ash etc. all use the same bank system I think.

I try to avoid the 6-month options since they are trickier to deal with. They auto-payments don't add up to the balance, so you have to make an additional payment, and those do have outrageously high interest that will hit you if you screw up. I have done them a couple times (for Fender it is the only option except maybe once a year on a special promotion), but I don't like the interest penalty hanging over my head, so I try to avoid them.

Read the fine print. The no-interest plans really are a great way to buy. Add discounts from your sales person, sales or coupons, and you are way ahead of just dropping it in your cart and check out with credit card.

If you are offered an interest rate below inflation, the cost of that is built into the price.

If you are offered an interest rate below LIBOR (being phased out) or SOFR, the cost of that is built into the price.

If you do not accept the financing that is below what banks can borrow at, or even inflation, and you do not get a discount, you are subsidizing other people.

 

[Peterson]

My first amp and bass ...I got a loan after that cash only

 

[whero]

I always pay by credit card. I get rewards for credit card spend and have done quite well out of it in the past.

But the card always gets paid off at the end of the month. If I'm looking at a big purchase and know I won't be able to afford to pay the full card balance at the end of the month, then I don't get it. I'll save a bit more and get it in another month or two.

 

[juggahnaught]

If I can't pay for it in full immediately (or if I wouldn't be comfortable doing so, or if the price is just stupid expensive and not worth it), I can't afford it.

When I do make a purchase that I can afford, I do put it on a credit card, mainly for two reasons: I get travel benefits if I use the card, and the transactions can be cancelled if there is an error or if there is fraud. However, I always pay the statement balance in full every month. (Essentially, I use my credit line the same way that I would cash - I don't spend what I don't have and I don't use the card to go beyond my means. I would only do so in the case of a real emergency.)

The only thing I would ever consider going into debt for and paying off in installments is a house. (Higher education would also be worthwhile, but I'm past that point.) Music equipment - especially bass gear - would never be worth it.

 

[BlueTalon]

Why would you want to improve your credit score? A high FICO score simply means that you've borrowed a lot of money. This is what the banks want you to do, so they can make money off of you.

That may or may not be true, depending on what you mean. I was in the Navy in the 80s, and the only credit cards I had were a Chevron card and a Shell card, for about 5 years. All I ever did was pay the balances each month, but in the process of doing that over a period of years, I built my credit score up into the 800s. I didn't even know I was doing it. When it came time to buy a house, it paid off big time.

That said, I would NOT use myself as an example for anyone else to emulate (marriage, depression, divorce, bankruptcy.) But that is a useful lesson for young people getting started with credit.

 

[LordRyan]

I always have enough money in reserve to cover any purchase I might make. Still I hate to put out large amounts of capital all at once. Right now some retailers offer up to 48 months to pay with 0% percent interest. I recently bought an instrument for over $3K on this payment plan. I'm careful to schedule my payments every month well ahead of the due date. My payments are only $68 a month with the final cost being the same as cash and I don't have to take a big chunk of money out of the bank.

 

[bassrique]

There is an online dealer out there that doesn't charge interest for their monthly payments on musical equipment. Is this wise? It depends.

 

[defdog99]

There is an online dealer out there that doesn't charge interest for their monthly payments on musical equipment. Is this wise? It depends.

And they give you 8% back to use on another purchase.

 

[txhawaii]

Credit cards are simple financial tools people fail to use properly. I purchased my first bass ($700) on a 18 month interest free card over 20 years ago. I had most of the cash at purchase time so I took it and purchased a 12 month savings bond then a 3 month bond and made interest on my cash and paid the card off before it came to term. I've done that with several big purchases and debts over time. There are some cards that offer 21 month no interest periods. Some music stores offer "layaway" payment but make sure you read the term. Once the term is up you are responsible for the interest. Pay anything you do off before the term is up and you've used their money for "free." If you can't save lets say $85/mo x 18 ($1530) in that time, you shouldn't be purchasing anything of any value.

And balance transfer cards charge a 2-3% fee on the balance. That fee is only affordable if your accrued interest over set time is greater than the transfer fee. You should never just pass the buck over and over again on balances. If you can't afford it, don't buy it.

 

[cnltb]

Luckily, I have noit yet had to buy any equipment on credit.

 

[MrClassicMetal]

I’m sorry, but this is the single most incorrect thing I’ve read all day.

You can have a high FICO score without “borrowing a lot of money”, and in fact a thin credit file will hurt you when you are underwritten for a mortgage.

Having a high FICO score means you pay dramatically less in interest on any purchase of substance - like a home or a car. It also means that you have more flexibility in terms of what you can get credit for, as a high credit score can offset layered risk.

Please don’t spew misinformation. There’s enough questionable info out there that is relatively harmless, but this sort of thing can actually mess with someone else’s financial health, which isn’t cool.

Ok, that was incorrect. It's how you handle debt.

 

[BobKos]

Why would you want to improve your credit score? A high FICO score simply means that you've borrowed a lot of money. This is what the banks want you to do, so they can make money off of you.

Employers, insurance companies and more look at your credit score as a direct correlation of the type of loss risk you are. Stellar credit means you might edge a lower credit score applicant for a great job. Or a lower rate (as in not a higher rate for poor credit applicant) for insurance of any kind. Yes - my current employer pinged my credit before I was hired.

 

[Acoustic356]

I write gear as a line item in my budget. If I don't spend it, it gets banked. If I want something that I don't have banked, I look at what the payoff will be with my gear budget. If I can beat the interest rates, then I'll get it.

Planning is key!

 

[factory presets]

Last bass I bought was $200. Probably put it on the cc. Or maybe it was the debit card. Can't remember, now. Each of those has a $1000 daily limit. TBH, I can't imagine, at this stage in life, spending more than that on music gear. If I ever did wake up one day with an unquenchable desire for an Alembic, I'd get it on redraw from our mortgage. Cheapest money I can get my hands on

 

[glocke1]

I'd never recommend buying anything on credit that cannot be paid off in a month or two.

That said, almost every bass I've bought has been through some kind of financing, and I've at times abused my 401k plan to buy a " must have " bass.

I won't get into any kind of rationalization for any of that, and I have regrets over a lot of it but at the time it made me happy.

In any case, don't be me.

 

[sxaxsx]

I've even bought cars in cash, I don't like owing people money, or paying more money for something than it's worth just to have it sooner. Music is just a hobby for me, if I can't afford to buy it in full then I can't afford to buy it.

 

[bolophonic]

Cash only.