Credit Terms – Read and Understand
Credit terms and conditions regardless of any other claims that may have been promised by a salesman are worthless! The only terms and conditions expressed in the written credit contract are the ones enforceable. Any promise of “no finance charge” if the amount should be paid off within a certain shorter time, should be clearly stated in your contract. Read it – 90 days is not the same as cash!
Don’t be enticed by foolish terms or promises to take on financial obligations which in reality may become more difficult for you as time goes on.
Beware of the misleading scheme promoted by misleading low terms, but winds up with a “balloon.” This means that the last payment is a big one – a “balloon” – so big you probably can’t pay it. Pay it, or else! Or refinance at a higher rate or be back charged for the interest from the purchase date at a high interest rate. That makes credit costly and unwise.
Beware of advertising of new or used furniture, automobiles or other items, supposedly on very low terms by your “taking over” payments not completed by a previous purchaser. Generally, this is just a selling gimmick and you’re not “taking over” anything except an obligation to pay for what you buy, probably on terms higher than advertised.
If you want to buy on credit, be sure that what you sign for you will in fact receive and it is not an agreement to pay cash. For example, in one scheme, the contract is made up as a purchase order, or agreement to purchase and pay for the goods ordered, including an application for credit subject to approval and acceptance by the seller. In such case, if credit is not approved or accepted, you are obligated, as agreed, to pay for the goods ordered. A deposit paid on such a contract is applied to the order and the balance is due in cash.
Payment terms can be made to sound very easy, but it is best to consider the complete transaction – your total obligation – total costs – total time – and other terms of the contract. You will be expected to fulfill all the terms of the contract, and the best policy is to know that you will be able to do so.
Related Articles
- Total Cost of Renting Money - Regardless of what the percentage cost may be, the important point is whether you want to pay and can make the total payments, by month or by year. If you choose and plan your credit transactions on the basis of total cost according to your ability to pay, you will avoid over-lapping and over-extension, the
- 6 Ways to Save On Credit - 1. Finance charges on installment purchases may vary, and you may choose the less costly. (or Pay Cash) 2. Shorten the time payment period as much as possible. 3. Make a large down payment and pay promptly so as to avoid extra charges. 4. If insurance is required, it should be described and listed separately with its cost.
- Credit Cost – Know the True Cost of Buying on Credit? - Do you know the true cost of purchasing an item on credit? Learn of the true credit cost first!
Comments