If local ...I pay cash. If online ...either 0% financing or bonus rewards (and paid off within 2 months with gig money)
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Buying basses with credit [poll]
- Thread starter tb-player
- Start date
I’ve convinced the spouse that maybe I can get another inexpensive bass, with the last one I bought being from 2015. Before that, 20 years, and 30 years since the one before that.
I had to pay off the house first to convince her (and me,tbf). I work in finance for a day job, and it’s shocking how much interest adds to the cost of a good, long term.
We nickel and dime for minor discounts here and there on a $1200 bass, but don’t think anything about adding $200 to the cost of interest. Would you like that same bass at $1400?
I had to pay off the house first to convince her (and me,tbf). I work in finance for a day job, and it’s shocking how much interest adds to the cost of a good, long term.
We nickel and dime for minor discounts here and there on a $1200 bass, but don’t think anything about adding $200 to the cost of interest. Would you like that same bass at $1400?
I needed to see this. In my late 20s here, currently in a lot of debt but I'm estimating my debt to be paid off by age 34..
0% financing or buying with a credit card that offers some type of reward points and paid in full before the next billing cycle are the two best financial options. I’m both scenarios you come out ahead from using cash (or debit card) and paying credit card interest.
The only caveat is that monthly payments under interest free financing can add up pretty darn quickly and you have to stay on top of it. If you miss a payment or do not pay the entire balance off on time, the amount of deferred interest you will be charged will be painful.
I worked with a lady who was paying over $300 a month just to QVC. She had a bit of a spending problem and got caught up on the deferred payment structure. In her mind, “oh this is just $12 a month - that is only $23 a month - and so on and so on. She wasn’t savvy enough to think of the entire bill, just that one small increment. It is easy to get caught up in that game, especially with companies like Sweetwater or MF that offer 48-months no interest. Only $100 a month for this insanely awesome Custom Shop bass? Why not. Only $80 a month got this Ampeg stack? $20 a month for a top of the like effects processor? You get the idea. It can add up extremely quickly.
The only caveat is that monthly payments under interest free financing can add up pretty darn quickly and you have to stay on top of it. If you miss a payment or do not pay the entire balance off on time, the amount of deferred interest you will be charged will be painful.
I worked with a lady who was paying over $300 a month just to QVC. She had a bit of a spending problem and got caught up on the deferred payment structure. In her mind, “oh this is just $12 a month - that is only $23 a month - and so on and so on. She wasn’t savvy enough to think of the entire bill, just that one small increment. It is easy to get caught up in that game, especially with companies like Sweetwater or MF that offer 48-months no interest. Only $100 a month for this insanely awesome Custom Shop bass? Why not. Only $80 a month got this Ampeg stack? $20 a month for a top of the like effects processor? You get the idea. It can add up extremely quickly.
Pay in full upfront, or I don’t buy it.
I used to sell finance - how do you think these companies make billions in profit each year?? Think about it….
I used to sell finance - how do you think these companies make billions in profit each year?? Think about it….
And how you handle it is super important.
You’re going to have a hard time getting a mortgage, even with a good credit score, if you don’t have a certain amount of history on your credit score.
Credit is one of those things where nobody will give you any (on good terms) unless someone else has. Once you get some, then more follows.
There are multiple versions of credit scores in use out there, depending on what you are obtaining credit for.
The good news is that above a level, it really doesn’t matter what the score is anymore. Depending on the version used, a 750 can get you exactly what an 800+ score does. Credit scores matter a lot more once you move down the spectrum.
The reason for this is that a modeled 0.05% chance of default versus 0.1% chance of default is pretty insignificant in practice. In contrast a 5% chance versus a 10% chance is huge.
If I can earn $300 through investments over the same period, then definitely.
Or…if inflation is running at such a clip that the bass is going to cost significantly more than $1400.
Chase can give tb-player $2,000 a year in cash back because for every tb-player who pays off their full balance every month, there are many many many more Chase credit card holders who do indeed pay loads of interest and even fees, every month. The financially undisciplined card holders (which is most of them), pay for the perks of the few who are disciplined.
GC does the monthly 0% because there are enough people that miss a payment and kicks in the retroactive 29% interest to make it worthwhile to them, well actually to Synchrony Bank or whoever is doing their card now. But even though I can pay outright for something it just seems easier to break out the crow bar, open the wallet and pay over a year or whatever at 0% interest. Just don't sell the item while you're still paying off an item and then don't use the money from the sale to pay off said item.
Right on! I always use AMEX for decent sized purchases for the added protection and the points! Why wouldn't you?
Yeah, and ironically people who have paid off all their debts see their FICO score take a nosedive...
Whichever of the 1st 3 options fits the situation the best:
1) (cash) Payment in Full: when it's a local deal / meeting in person or if cash offers the best price (when #2 is not applicable)
2) Credit Card when cash is not needed and/or where additional "protection" may be needed; Reverb Fraud
3) 0% when offered at "same as cash" price (and 2 does not apply)
I will use GC 0% because of their return policy, and because my local store has a really good staff.
I've used Paypal Credit 0% here and there, but not if there's any question about the deal.
Also - (maybe it's been mentioned already): Many major credit cards automatically give you extended warranty protection on purchases. Check the fine print.
1) (cash) Payment in Full: when it's a local deal / meeting in person or if cash offers the best price (when #2 is not applicable)
2) Credit Card when cash is not needed and/or where additional "protection" may be needed; Reverb Fraud
3) 0% when offered at "same as cash" price (and 2 does not apply)
I will use GC 0% because of their return policy, and because my local store has a really good staff.
I've used Paypal Credit 0% here and there, but not if there's any question about the deal.
Also - (maybe it's been mentioned already): Many major credit cards automatically give you extended warranty protection on purchases. Check the fine print.
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We discussed this already. And I'm sure everyone's fine print on a CC contract is different.
In addition, my point was more towards the equation Profit = Revenue - Cost. They cannot give away money (cost) without sufficient revenue. A company cannot stay in business long with negative profits.
I better call FICO and tell them to drop my score. They seem to have not noticed my lack of debt.
thank you for pointing this out. Tons of rich people use credit wisely to their advantage. The assumption is there is no way to use credit wisely is pretty foolish and easily discredited…no pun…ok pun.
That said if for most people are against using cards is not at all a bad thing because you won’t fall into a trap or hard times from credit because life happened.
