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Just wondered how many folks have financed audio purchases. I haven't, but know quite a few that have. I noticed that one of the hi end salons that we frequent will finance up to 80% of purchases. I don't think the shop is doing this out of desperation as there are always extremely busy.
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Finance charges are a no-no for me, except where I have no choice (house, cars).
Then again, some places charge different prices for cash sales and same as cash financing. I'm not sure I've ever seen it for audio but I have seen it for major home improvement purchases like furnaces and a/c's, and in other areas.
I didn't buy my Technics SP-15 and EPA-250 until they had been discontinued for nearly 30 years !
I paid cash.
Dean.
reelsmith's axiom: Its going to be used equipment when I sell it, so it may as well be used equipment when I buy it.
Ok let's say you are financing your 1st good system.You spent 25,000 10 years ago and made no compromises on the gear and financed it for 3-5 years
You still have it and love it! You bought right the first time. Gear today the new system you had to buy because you did not spring for the good stuff 10 years earlier would cost far more than what you would have payed in interest. And the old system the one you should have bought probably is still worth a few bucks assuming you bought quality gear in the first place.
Financing may not have been the worst thing to do.
I remember I had an ATT credit card Zero interest until payed off as long as you were not late in paying. Bought my wife's engagement ring on that deal and was in no hurry to pay it off.
If you are able to save up $25,000 in just a year, or better yet spend $25000 out of pocket you are very fortunate.
I've never borrowed for stereo equipment. I HAVE bought a plasma screen and a laptop on "bill me later", the plasma was paid off before any interest was due. The laptop didn't fair so well, but fortunately it wasn't that expensive a purchase, so the total interest was not that much.
Credit cards have a been a problem in the past, usually for taking cross country trips to visit relatives, those just add up way too fast.
Fortunately I have been paying them off and just have one left, there are some things that are just easier to pay with on a credit card. There are some places that won't take a debit card, it has to be a real credit card.
John S.
You're much better protected with a credit card, vs a debit card. Using a credit card for travel is not a bad idea.
But Abe, is there a piece of gear you've heard, that you would have done anything to own.
...and I've bought items on time including the use of my credit card. But that was decades ago and I no longer do that.
If I can't afford to pay cash I don't buy it.... Or I'll use my credit card for the travel mileage perks then pay it off with a cash transfer from a savings or checking account.
is that if you carry even a penny of balance, the double digit interest is based upon the average daily balance , not the amount left. What credit card companies want you to do is pay the minimum amount (on time) each month for the rest of your life.
I charge most everything I can to get the cash and travel perks and never carry a balance. I have zero debt including home and vehicles.
Back in '81, I took out a low fixed rate bank loan for about $3k to buy an amp and transformers for my stats. No way I was going to put than on a credit card.
I use my credit card for perks then pay it off before any interest accrues. Our cars are paid for, one a 2007, the other a 2012. The only debt I have is the home mortgage but it's mostly been paid down well below the current market value of the home. And our savings and other investments are greater than the mortgage debt.
My point was, you are better protected against fraud with a credit card vs a debit card making a credit card a better choice for travel and some other scenarios like large purchases.... provided you are disciplined enough to pay it off quickly. Debit card fraud can wipe out your entire account. Personal liability is much reduced with a credit card.
Sounds like you've gone down a similar path, but are younger. It's really nice once the house is fully paid off.
Remember the movie Catch Me if You Can ? I heard the real life character Frank Abagnale Jr. talking on NPR a few years ago about fraud. His recommendation? Avoid checks and debit cards. Charge everything you can so that the bank takes the risk!
Yes, fun movie! But I wasn't aware of and haven't read anything about the real life character. Good advise.
I was not so disciplined in my youth with credit cards. It was almost a game to me to see how much of a credit line I could amass with credit cards. I signed up for nearly every credit card offer.
Not that I ran them all up but I had one card with a rather large balance on it. And then I lost my job. It took me a very long time to dig out of debt. I learned my lesson, the hard way.
Considering new gear drops 40% as it goes out the door, NOPE!
I might use a credit card and pay it off in one or two lump payments but that's not really 'buying on time'.
The only debt we have is our home mortgage and it's paid down considerably vs market value. Cars are all paid for. Our only credit card debt is paid off regularly.
I usually did so in the next month.
... Keynes, Galbraith, Samuelson, Shiller, Reich, Stiglitz, Krugman, Singh
The shop Is not taking the risk. They sell the paper to a finance company. By offering financing they can Increase their sales.
nt.
Hahahaha! There are several really great replies here! I particularly liked the view about gambling vs frivolities, and the one about taking it with you in the casket, and a couple others. Youse guyz.
Anyway... It's a money management question. If you pay 8 - 18 percent on that credit account, are you making more (after taxes) by using your money elsewhere? It's also an opportunity question. Whatever interest rate you pay on the borrowed money, is it justified by taking the opportunity now rather than later, when the opportunity might not be available or the price will be significantly higher? It's also a lifestyle question. Are you in an income position where you can afford the monthly payments, and you'd like to have the product now rather than waiting until you can pay cash?
Just please don't say that you bought Activision today at $11.66, 'cause it's fixin' to go down.
Never. I don't buy unless I have the cash.
I will buy on my credit card for the extra protection of large purchases, but I pay it off as soon as the bill comes.
Jack
I just can't fathom going into debt for stereo equipment. I would rather do without. I think mediocre sound is much more desirable than debt.
Refinancing the car at 5% was cheaper than any other option. I wanted to TV. Not a problem.
I financed a pair of Hales Revelation 3 speakers while I was in college, but I paid it off before I incured any interest charges.
Remember, it's all about the music.
Stick it on a credit card like everything else in life , who cares, good luck collecting it when I die, as a matter of fact put that casket and elaborate funeral on my credit card before I perish in this hospital room. Cram all the electronics in the box with me before you plant me, I'm taking it all with me.
Edits: 08/08/12
For some reason, I want to own my audio gear as I acquire it.
I owe no one nuttin and sleep well at night.
in 1981 when I was young, single and had few financial responsibilities. It also helped establish my credit record.
Still use the Threshold amp I purchased to this day. I'd say I've fully amortized the interest!
...never for frivolities like audio gear. That would be irresponsible.
.
Borrow for necessities, pay cash for toys. Do that your entire life and you will be financially secure.
-Wendell
Absolutely agree, pay cash for toys.
For anything else shop around, we have a big department store not far from us who always have incredible finance offers, their latest is 48 months interest free so even if you have the cash you may as well leave it in the bank collecting interest and use the shop finance. Their prices are as good as anyone elses too so they must be buying well.
Remember: In the game of life, he who dies with the most toys wins.
"even if you have the cash you may as well leave it in the bank collecting interest"
You obviously don't live in the U.S., where current bank interest rates are in the neighborhood of 0.1 percent. Might as well keep it under the mattress.
You're right, I live in New zealand. Interest is about 2% so not much but better than nothing.
Purchasing audio gear with borrowed money is stupid, something only a fool would do.
because although many may pay the balance before interest accumulates, it pretty obvious that some don't.
In my jargon that's borrowing money so you must deal with a whole lotta cash at your home store.
Using a CC as a source of money you don't have to buy unnecessary luxuries and using it for convenience and then paying it off in one month with no interest are two entirely different things! Yes, I am a home based audio dealer, cash only.
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