Buying on Credit means having something now and paying for it later. You can choose the computer you want now and use it while you pay for it. There's no need to save for months and no need to dip into any savings you might have.
Remember... using credit involves borrowing someone else's money and it can be expensive. You will usually end up paying back more than you borrow, as the lender will probably charge interest. The lender is in business and aims to make a profit.
It pays to shop around and the same principle applies to credit deals. Some are much more expensive than others because different companies charge different interest rates. Look out for the letters 'APR', usually followed by a percentage (%) e.g. 'APR 20%'. You'll see them on lots of advertisements for credit in newspapers, shop windows and leaflets. Where the period of the loan is the same, the lower the 'APR' the better the deal.
Buying on credit can be very costly, so you must think very carefully before you commit yourself and not just hope you'll be able to afford the repayments. Do your sums and try to make sure that you will. Think about what would happen if you suddenly had to cope with a drop in income such as losing your job.
Never let yourself be pressurized into taking out a credit agreement. Don't sign any agreement until you've read it and can understand it
Businesses associated with credit:
- Tries to find you credit, because you find it difficult to get credit yourself
- You have to pay the broker a fee or commission which is high
- It is possible to take out insurance to cover your credit repayments
- It provides for the repayment of installments which you cannot make because of loss of income through unemployment or sickness, and repayment of the whole debt if you die
- You pay the premium for the insurance policy as well as repaying the debt
- They 'buy' bad debts from finance houses for a small sum and then try to recover the debt themselves
- Advise you if you have difficulty in repaying debts
- They charge a fee for this
- They may give you advice or negotiate on your behalf with creditors e.g. to get the repayment period extended