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 cause of a large part of credit difficulties.
The carrying charges on credit purchases or on cash loans are not strictly “interest” or pure rent for the use of money. These charges are made up of various costs to the company giving the credit, including operating and administrative expenses, cost of investigation, billing, collecting, clerical costs and for other services in addition to any cost for the use or rental of money.
No person who shops and compares credit services and intelligently gets and understands the facts would be caught by unfair loan or credit schemes. Financing of consumer contracts and purchases and loaning money is a competitive business, even within legal regulations, and therefore, credit terms, conditions, services and charges may differ among the various credit sources.
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