Best Buy has a great name. You can get a best buy on your favorite home appliances and electronics, at an economical price.
Buying for the best price alone is a part of binge shopping. Stores like Best Buy depend on consumers to buy the “latest and greatest” items. Never forget- there is a cost for having the latest trend.
There are some rules for buying large consumer items. First, never buy on a store credit card. You cannot afford the convenience, due to the high interest rate on the card. I have looked at the rates on my credit cards, and the store cards are almost always 18% or more, per year.
Watch out for “teaser rates” on store credit cards. The teaser rate is a low rate on a card, which expires after a period of time. For example, a store allowed customers to purchase goods on a store credit, with 0% interest for one year. After one year, the rate went up to approximately 18%. Not only that, if you failed to pay off the credit card balance within the teaser rate period, one year, you were charged the interest from the date of the purchase. So if you bought an item for $2,000 on January 1 and failed to pay the bill completely before the end of the year, you had to pay interest from January 1 to December 31 for past due interest. Don’t get caught in the “teaser rate trap.”
Watch out for buying the largest item in the store. I remember the trend to buy large screen flat panel televisions, which cost $5,000 per TV. If you buy on credit at 20% a year, the interest charges alone are $1,000 per year. This is a fast purchase toward bankruptcy.
All appliances and electronics should be purchased for cash. The bigger the item, the more important it is to pay cash. For most household appliances, under $1,000, you need to have a cash reserve to pay for the item. Only use store credit in an absolute emergency, such as when your refrigerator must be replaced, and you have no cash or other source of credit.
With electronics and appliances – separate the necessities from the conveniences. A convenience such a large screen TV does not need to be bought immediately on credit. If the refrigerator breaks, you may have no choice but to use a store credit card.
SHOPPING TIP – EXCEPT IN EMERGENCIES, SET A LIMIT ON THE AMOUNT OF MONEY YOU WILL SPEND PRIOR TO ENTERING A STORE. TYPICALLY THE AMOUNT IS $50 TO $100. GO LOOK FOR THE ITEM YOU WOULD LIKE TO PURCHASE. REVIEW YOUR CHOICES. THEN LEAVE THE STORE AND WAIT 7 DAYS. IF YOU STILL WANT THE ITEM, YOU CAN GO BACK AND PURCHASE IT, WITHOUT BINGE SHOPPING.
If you have too much debt on your credit cards, please feel free to contact Attorney Singer.
Attorney Robert M. Singer
Law Offices of Robert M. Singer, LLC
2572 Whitney Avenue
Hamden, CT 06518
203-248-8278