Watch Finance Company Credit Lines
Written on June 4, 2009 – 6:37 PM | by dodolovesme
Some finance companies and large retailers often offer to finance goods on hire purchase with catchy slogans and seemingly easy terms. Watch out for this practice. This is often a very expensive way to finance the purchase of goods that will eventually lose their value.
The main hitch is — the interest rate is around 28% and could be even higher depending on the general level of interest rates!
Let’s go back to basics for a moment. Why are we thinking of using this facility? Either we do not have the money at all, or we do not have it with us.
I want to teach you how to translate situations into financial terms. In this case it translates into “I don’t have any money, but 1 must have that item now and I don’t really care what price I pay to get it.” It’s a good way to end up in financial problems.
It is well known that it is people from lower income groups who tend to use these finance company credit lines most of all. Sadly, many of these people have lower incomes because of lack of financial education. What other reason is there for booking up goods at 28% interest when, at the very least, you could use a credit card and pay a much lower rate of interest. The finance companies justify their higher rates by saying that they lend to less creditworthy people so that they have more bad debts. Accordingly they have to charge more. That may be so but YOU, dear reader, are hot on the trail of financial success. Why should YOU pay a higher rate to subsidise losses on people who are poor money managers?
Finance company credit lines are another enemy of your money tree — unfortunately they have a harder bite than ordinary lines of credit.
Bank and Building Society Personal Loans
If you have to get a loan to buy a consumer item a bank or building society is by far the best place to go. Not only are their interest rates lower than those charged by finance companies but their hidden charges are much less.
Bank personal loans normally carry a fixed interest rate at slightly higher than the prime overdraft rate. Some banks and building societies might have a small application fee but this is not a widespread practice.
Overall there is little difference between banks and building societies when it comes to personal loans. If you need a personal loan they are the only places to go. In the last few years many of the differences between banks and building societies have disappeared.
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Watch Finance Company Credit Lines
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Tags: building societies, company credit lines, credit, credit aware, credit card, finance, finance companies, financial, interest, money, personal, personal loans
3 Responses to “Watch Finance Company Credit Lines”
By Wills Trusts Estates on Dec 12, 2009 | Reply
This usually involves spending a lot of money on Yellow Page advertisements or joining a referral service. … Wills Trusts Estates
By Online Bank Transfer on Dec 12, 2009 | Reply
5) Cancellations To cancel an order, Once we have cancelled the order, we will ensure our billing services either cancel online payment, or we’ll arrange a refund by cheque or bank transfer. … Online Bank Transfer
By Aggregate your Bank Accounts on Dec 13, 2009 | Reply
Barry Stamped, Joint Managing Director of the UK leading online credit reference agency, said an examination of banking industry fraud loss figures illustrate just why the government is wrong to claim that identity cards are a panacea to the dangers of identity theft. … Aggregate your Bank Accounts