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View Full Version : About to make a move on a refurb 13", have a financing question




aooga12
May 5, 2013, 09:43 PM
I have $700/$1058 needed. I was thinking why not apply for the credit card and do the 12 month payments? I can get the $350 difference over the summer easy, and rack up some credit by the end of the payment period? Only about $88 per month, which 700 would cover about 8/12. :confused:



itsOver9000
May 5, 2013, 10:39 PM
If you don't have the money to pay for it all right now I would wait until you do. Just my thinking.

If you can get the $350 difference by the end of summer you might even save a little $$. 2012 refurbs. should drop in price a little once the 2013 models are out, right? Or you might even be able to pick up a refurb. with better specs than you could get right now for about the same price..:confused:

KylePowers
May 5, 2013, 10:56 PM
Financing from whom?

You're not going to get approved, or at least a high enough credit limit, if you don't already have a good credit score and/or some type of regular income.

I'd just save up and pay it in full.

Mrbobb
May 6, 2013, 12:16 AM
Disagree with those 2. If u quality for such 12-month, NO INTEREST plan why not? There's really nothing to loose EXCEPT they say if you have too many of those CC, they lower your credit score. 1-2 should be OK. You pay full in 12 month, there is no interest charged, but you have to be diligent on paying each month. If u let it slip and just pay the minimum, it piles up easy.

ColdCase
May 6, 2013, 08:04 AM
No interest loans are great, as long as your disciplined enough to pay them off. They count on enough folks not paying off and collecting the substantial interest payments to make money.

The Apple store offer is basically for a credit card and, if they approve you, go for it. Nothing to loose.

aooga12
May 6, 2013, 08:44 AM
didn't get approved, oh well :(

talmy
May 6, 2013, 08:59 AM
didn't get approved, oh well :(

Consider yourself lucky. It's considered a bad practice to borrow money to buy depreciating assets.

Patience! Wait until you can make the purchase in cash.

aooga12
May 6, 2013, 09:30 AM
Consider yourself lucky. It's considered a bad practice to borrow money to buy depreciating assets.

Patience! Wait until you can make the purchase in cash.

i didn't know that if what i buy is deprecating that it's considered bad?

talmy
May 6, 2013, 10:30 AM
i didn't know that if what i buy is deprecating that it's considered bad?

Because you are (potentially) paying extra to buy something that will lose value. Makes no sense to pay money to lose it! On the other hand, borrowing to buy something that will potentially rise in value can be a good thing.

So if you have a way to make money using a computer (computer generated income less depreciation is a positive value), borrowing in order to buy it makes sense. If it's just to have a new toy, then no.

Invest wisely!

Mrbobb
May 6, 2013, 12:24 PM
Yeah dude, those financing are for people with a certain credit history, not everybody. As the joke goes, they only want to lent money to those who HAVE it. ;)

wolfpuppies3
May 7, 2013, 03:30 PM
Save for it. If you cannot pay for it, keep saving until you can.

sostoobad
May 7, 2013, 06:00 PM
Consider yourself lucky. It's considered a bad practice to borrow money to buy depreciating assets.

Patience! Wait until you can make the purchase in cash.

If that were totally true the new car industry would go away.
The OP got turned own because of either bad/slow credit or no credit.

If one can afford the payments, interest free financing makes total sense.
The cost of the money is FREE, why pay upfront for it,when you can pay over time...money is pretty much always worth less in the future.

talmy
May 7, 2013, 06:31 PM
If that were totally true the new car industry would go away.
The OP got turned own because of either bad/slow credit or no credit.

If one can afford the payments, interest free financing makes total sense.
The cost of the money is FREE, why pay upfront for it,when you can pay over time...money is pretty much always worth less in the future.

The risk here, and what they are betting on, is that you will be late for a payment. Then everything retroactively reverts to a high rate and you get charged a late fee as well. Also, borrowing the money reduces your potential to get credit for when you really need it.

I'd prefer to pay cash and sleep easy. And that includes car purchases. These can be particularly ugly because, even with 0% you are immediately "under water" in a position where you can't even sell the car if you get into financial straits.

arbogast777
May 7, 2013, 10:37 PM
I'd actually have to disagree with the concensus here, in that I think financing things like that can be a good idea. Paying cash for everything will not help you build up credit, even if it is buying a depreciating asset. It is of course true that you don't want to get in over your head with these types of purchases, but the OP said he had something like 75% of the needed money. What I would have done is put that $800 aside in an account or an envelope, financed it, then drawn the monthly payment out of that money I put aside, adding in a little each month to make up for what he'll be short at the end. I did things like that all the time when I was younger, and my credit score is now 810 ;)

talmy
May 7, 2013, 11:16 PM
I expect the OP would have to get a high-interest credit card. Paying that in full every month will build up a credit score without paying interest. Then he would be able to qualify for a 0% rate purchase.

The good deals require well established credit. Meanwhile his best bet is to save up the money, buy the Mac on the credit card, and pay it off immediately!

JHUFrank
May 8, 2013, 06:22 AM
Is this true for even a car and a number of homes? Just wondering Consider yourself lucky. It's considered a bad practice to borrow money to buy depreciating assets.

Patience! Wait until you can make the purchase in cash.

talmy
May 8, 2013, 09:36 AM
Is this true for even a car and a number of homes? Just wondering

Homes will pay off given enough time for market fluctuations to smooth out. I certainly believe them to be good investments if you tend to stay in the same place for many years.

I don't believe in car financing. Only rarely does a car appreciate (low volume models with high demand may appreciate, as may collectors cars, but we are talking about those). Not only does car financing cause that very risky "underwater" situations but people tend to buy based on the monthly payment rather than looking at the total cost of ownership. I think if people looked at TCO there would be far fewer new cars sold!

DisplacedMic
May 8, 2013, 11:19 AM
I have $700/$1058 needed. I was thinking why not apply for the credit card and do the 12 month payments? I can get the $350 difference over the summer easy, and rack up some credit by the end of the payment period? Only about $88 per month, which 700 would cover about 8/12. :confused:

I'd like to throw my hat in with the people saying that financing a computer is a terrible investment.

I know it's not what you want to hear but if you didn't get approved then you either don't have enough credit or you have bad credit - both of which should serve as a warning against making a purchase like this on credit!

presumably you're young so i would get in the habit now of paying cash for things that aren't either a good investment or something that you HAVE to have. Generally a new computer is neither of those things.

Look at it this way, if you spend the next 6-12 months saving up you will never regret it - you might if you buy it now and miss a payment or something else comes up. More importantly, that same device you are looking to purchase now will have drastically depreciated in price so you can either get it for less money or get something better.

DisplacedMic
May 8, 2013, 11:39 AM
I'd actually have to disagree with the concensus here, in that I think financing things like that can be a good idea. Paying cash for everything will not help you build up credit, even if it is buying a depreciating asset. It is of course true that you don't want to get in over your head with these types of purchases, but the OP said he had something like 75% of the needed money. What I would have done is put that $800 aside in an account or an envelope, financed it, then drawn the monthly payment out of that money I put aside, adding in a little each month to make up for what he'll be short at the end. I did things like that all the time when I was younger, and my credit score is now 810 ;)

You don't have to carry a balance to build up credit. If this guy was rejected for a 1k credit then he either has no or terrible credit - either way getting a card and then filling it up will hurt his credit score and make getting the next loan (one he might actually need) more difficult and/or costly.

best thing to do is get a low interest low limit card from your bank or credit union and pay it off every month. save up for the computer or other big but manageable purchases and either pay cash or put it on the card and pay it back without carrying a balance the next month.

A great way to do this is to only put monthly expenses on the card - internet, power, phone etc and pay them off each month. expenses that don't change. everything else should be cash - including food and computers.


just my advice based on not following any of this when i was younger despite knowing then and now that is precisely what I should have done ;-p

FWIW i am 32, 2 kids, just at 6 figure total household income, house, 2 paid off used cars, 830 credit score.

old-wiz
May 8, 2013, 01:44 PM
We pay off our credit cards every month, and still they increase our credit line, despite us not even using 1/2 the limit. We have not carried any balance for years.

Mrbobb
May 8, 2013, 01:49 PM
830 credit score.

Show off. :D

talmy
May 8, 2013, 02:18 PM
We pay off our credit cards every month, and still they increase our credit line, despite us not even using 1/2 the limit. We have not carried any balance for years.

Same here, but I've called them to have our credit limit reduced so if I really needed credit for a major purchase I could get it (and not at credit card rates!). Helping things out, our credit cards all have "auto pay" of the full balance so I never have to worry about missing the payment.

old-wiz
May 8, 2013, 05:41 PM
Same here, but I've called them to have our credit limit reduced so if I really needed credit for a major purchase I could get it (and not at credit card rates!). Helping things out, our credit cards all have "auto pay" of the full balance so I never have to worry about missing the payment.

We called them a year or more ago and got them to reduce the credit limit...then 6 months or so later..they increased it again. sheeesh

DisplacedMic
May 8, 2013, 06:00 PM
Show off. :D

hehe, believe me it's about 150 higher than it was 10 years ago

Cubytus
May 8, 2013, 06:05 PM
Disagree with those 2. If u quality for such 12-month, NO INTEREST plan why not? There's really nothing to loose EXCEPT they say if you have too many of those CC, they lower your credit score. 1-2 should be OK. You pay full in 12 month, there is no interest charged, but you have to be diligent on paying each month. If u let it slip and just pay the minimum, it piles up easy.Never, ever pay just the minimum amount required. Always pay as much as you can. Rule of thumb: if you won't have it in your account my next paycheck, DON'T BUY IT!!

No interest loans are great, as long as your disciplined enough to pay them off. They count on enough folks not paying off and collecting the substantial interest payments to make money.

The Apple store offer is basically for a credit card and, if they approve you, go for it. Nothing to loose.Silly question, but do you need to apply for a new credit card each time you want to finance a Mac?

Because you are (potentially) paying extra to buy something that will lose value. Makes no sense to pay money to lose it! On the other hand, borrowing to buy something that will potentially rise in value can be a good thing.On the other hand, it is a highly risked move to borrow money to invest, say, in RRSP, or any other type of stock investment. Most financial planners will discourage people from doing so.


If one can afford the payments, interest free financing makes total sense.
The cost of the money is FREE, why pay upfront for it,when you can pay over time...money is pretty much always worth less in the future.On the other hand, with a short timeframe such as is for the financing of a Mac, depreciation of money would probably stay minimal.


best thing to do is get a low interest low limit card from your bank or credit union and pay it off every month. save up for the computer or other big but manageable purchases and either pay cash or put it on the card and pay it back without carrying a balance the next month.

A great way to do this is to only put monthly expenses on the card - internet, power, phone etc and pay them off each month. expenses that don't change. everything else should be cash - including food and computers.

just my advice based on not following any of this when i was younger despite knowing then and now that is precisely what I should have done ;-p

FWIW i am 32, 2 kids, just at 6 figure total household income, house, 2 paid off used cars, 830 credit score.Agree with you. Additionally, avoid credit cards that have rewards on them. They end up costing more for the consumer as well as the retailers, who in the end are raising prices to make up for the losses.

Low interest credit cards, on the other hand, are not strictly necessary as long as you're paying within the grace period (usually 21 days). But if you tend to overdue your account even by a slight margin on reasonable amounts, then the $40 annual it costs for the reduced interest rate will definitely be wisely spent.

I won't trust a Canadian cell phone company to act decently if given access to a credit card. On the other hand, I put many small expenses (including food from big chains that can absorb the cost to accept credit cards) on my card, and Internet access (independent ISP), and home insurance, and pay it off every two weeks. Last time I saw a balance on the "interest charged" line, it was about 3.08$. Ironically still, my income has been in the low 5 digits, but I managed to keep a top credit rating, currently at 780, mainly because an old shˇtty ISP charged me $700 of unpaid debt. I can't have them delete that from the record as these documents were lost in a hard drive crash :( Now you know why I am always recommending doing your backups not once, but twice, and pay for them as necessary.

Building credit is slow, but easy. Even without a credit card, subscribing to post-paid services and paying them on time will build your credit. Despite constant solicitation, I just have one credit card at a standard low-interest of 12.9%. My other bank has proposed that I get a Visa from them, but I politely refused, as I seen no clear advantage in having both a MasterCard and a Visa. I told them that I may be considering an Amex since one or two big chains here only accept it as a means of payment, and they didn't have any.

Same here, but I've called them to have our credit limit reduced so if I really needed credit for a major purchase I could get it (and not at credit card rates!). Helping things out, our credit cards all have "auto pay" of the full balance so I never have to worry about missing the payment.I did the same just before confirming my $30k line of credit, reducing my card limit from $18k. I just stayed wise with $9k on the card, but still can't figure out what I would ever buy for that amount on a card. Ironically enough, the day I called in to activate my renewal card, I was told that I have been approved for a credit limit increment. I kept my card at $9k mainly because I know that hitting more than two-thirds of the limit on a card is detrimental to one's rating, and that it was historically harder to get a limit increase than a decrease. Does this still holds true?

One thing I still don't know: I was told that a credit card account that has been opened a long while ago was worth more "positive weight" in the credit rating than a recently-obtained credit card. Is that true?

talmy
May 8, 2013, 06:51 PM
On the other hand, it is a highly risked move to borrow money to invest, say, in RRSP, or any other type of stock investment. Most financial planners will discourage people from doing so.

Leveraging like this makes investments very risky. I have broker accounts but margin trades are not set up, on purpose!

Additionally, avoid credit cards that have rewards on them. They end up costing more for the consumer as well as the retailers, who in the end are raising prices to make up for the losses.

Sorry. I gotta play the game. I've got four cards, all with cash-back rewards. Every purchase I can make via a card I do so.

My other bank has proposed that I get a Visa from them, but I politely refused, as I seen no clear advantage in having both a MasterCard and a Visa. I told them that I may be considering an Amex since one or two big chains here only accept it as a means of payment, and they didn't have any.

I've got Amex only for Costco (it's the only card they take). The other three cards have varying quarterly 5% cashback offers, so I determine what card to use by the current offer. BTW, a Discover card gives 5% off at the online Apple Store, even on refurbs.

I kept my card at $9k mainly because I know that hitting more than two-thirds of the limit on a card is detrimental to one's rating, and that it was historically harder to get a limit increase than a decrease. Does this still holds true?

I don't know. I've never asked to get a limit increase.

One thing I still don't know: I was told that a credit card account that has been opened a long while ago was worth more "positive weight" in the credit rating than a recently-obtained credit card. Is that true?

Certainly true. Opening an account basically reduces your pool of available credit so will at least temporarily reduce your credit rating. Opening multiple cards is a "red flag." This is another reason not to open an account for just one purchase.

sostoobad
May 9, 2013, 12:10 PM
Obviously getting a credit card means you need to pay for the things you buy, but anytime someone offers me free financing vs cash and the price is the same....I will take the free financing...I am a big boy and don't forget to make a payment etc..

I have used the Apple financing to buy a Air, worked out great.
Very few people can buy a new car for cash, and again if the financing is free or very low, I would keep the cash and take the loan.

How much cash do I want to put into a depreciating asset....ZERO

I use my Amex card to buy things like gas and groceries at the end of the yr, I add up my points and usually get $300-500 at Lands end, free clothes, had I paid cash....no free clothes....depends on the deal folks.

Mrbobb
May 9, 2013, 12:38 PM
Finance Curiosity: Mark Zuckerberg got a mortgage for his house! (nothing ostentatious, just a few millions) WHY bother?

Cubytus
May 9, 2013, 01:50 PM
Leveraging like this makes investments very risky. I have broker accounts but margin trades are not set up, on purpose!In a naturally high-interest loan and low-interest investments, even cutting as much as you can on brokerage fees, your return is likely to be razor thin, probably not enough to beat inflation on the long term.

Sorry. I gotta play the game. I've got four cards, all with cash-back rewards. Every purchase I can make via a card I do so.Again, this is detrimental to the end consumer. Some jurisdictions don't allow retailers to add a fee when paid by credit card, but sometimes they do allow to put a discount when paid for by debit or cash. This would be fair for smaller retailers as it costs them much just to rent the machine and pay the commission on transactions.

Amex used to be the most expensive for them to take, the reason why most retailers don't take it. I don't know if it's the case for Discover, it doesn't seem to be widespread here up north as I neversee their logo on the

I don't know. I've never asked to get a limit increase.I did, once, since I started with a $1k limit, and my first big purchase would have been a computer. Back in 2004 you couldn't get a decent computer below $1k, so I asked for a $500 increase that was refused at the time. Then came meager times, and I kept on loading the card, and when I was about to hit the ceiling, it suddenly increased by itself. This practice is now forbidden as it was argued that it pushed some (irresponsible) people deeper into debt, but I was lucky enough that, when I finally wiped it clean, I kept the higher limit.

This high limit may come in handy if I need to finance my parent's machines, as they have a credit so bad they can't even apply for a card. Of course I would make them sign a contract for that.

Certainly true. Opening an account basically reduces your pool of available credit so will at least temporarily reduce your credit rating. Opening multiple cards is a "red flag." This is another reason not to open an account for just one purchase.I meant, if I would close the older account to open another, maybe with better interest rate? I read about a 8.9%, no annual feee credit card available only to those with the best credit history, and I was told they even checked the neighborhood one's living in. Ironically enough, mine is rather poor. I'd rather live poorly and be debt-free than feeling falsely rich and have a passive more than 150% of what I actually have. I lived what it is when creditors and collectors are calling every day.

Still, it doesn't answer my silly question so as to know whether or not Apple requires applying for a new card each time you need to finance a Mac.

Mrbobb
May 9, 2013, 07:13 PM
Still, it doesn't answer my silly question so as to know whether or not Apple requires applying for a new card each time you need to finance a Mac.

I believe that is a negative.

Merchants partner with a bank, so when u do this, u are given a CC issued by that bank. You can use the CC for other purchases but is it's usually high rate >18%.

As long as Apple doesn't change bank or terms, u can keep buying stuff from Apple.

racer1441
May 9, 2013, 07:32 PM
Consider yourself lucky. It's considered a bad practice to borrow money to buy depreciating assets.

Patience! Wait until you can make the purchase in cash.

This is 100% wrong in today's world. Yes, when interest rates were 5, 8, 10, 20 percentage, yes. But now interest is at practically nothing. Use house money.

The only way it's a problem is if you aren't diciplined enough to pay off by the end of the interest free period. If that's the case, you'll screw up some way no matter what, so why bother.

----------

Finance Curiosity: Mark Zuckerberg got a mortgage for his house! (nothing ostentatious, just a few millions) WHY bother?

Money is cheap now. Why pay a lump sum when you can pay pennies for the loan and still have the cash.

Cubytus
May 12, 2013, 02:42 AM
I don't know if we are reading the same news, but interest on credit cards keep on climbing, even when base rate is at an historical low. Now it is considered standard to have a credit card at 21.99%.

My student line of credit interest surely hasn't been cut, and I am sure some may have seen this picture stating that the richest banks could borrow from the government at 0.75%, while students, often the poorest side of homeless people, are charged 6.8%.

I do agree that, if the interest is 0% and you are disciplined enough to pay before the grace period, then go for it, unless your credit rating takes a hit because of this borrowes money.

Other silly question here, does applying for a new card has any worse detrimental effect on the credit rating than getting a line of credit, or a loan? I never could understand why a bank would push a credit card instead of a goods-specific loan.