Problems associated with buying on finance

Some people do not have the funds to buy expensive gadgets and appliances by making an upfront payment. To lure these potential customers into buying the gadget the product manufacturer or dealer may offer finance, so that the customer is able to purchase the gadget without any upfront payment.

The customer can pay the amount due later in installments, over a period which ranges from three months to five years . Many companies tempt their customers further by offering interest free installments. However, most customers are not aware of the hidden risks -problems associated with buying on finance.

Though many shoppers consider the price for buying on finance with smaller installments attractive, they often have to pay a price which is significantly higher than an upfront payment. Most credit card companies charge an additional processing fee, and this has to be borne by the customer.

Additional the bank issuing the credit card may charge interest on the installments to be paid, making the gadget or appliance more expensive. If the shopper makes an upfront payment for the gadget, especially in cash, they may be able to negotiate a better price or get a better deal with freebies.

If the purchase of the expensive gadget or appliance is made on finance, the amount may be directly debited from the bank account or charged to the credit card. This often entails providing confidential personal information and completing the necessary paperwork, which can be time consuming. Also there is a possibility that this confidential information will be misused against the shopper to cause financial and other losses, if proper precautions are not taken.

Additionally it is difficult to cancel the credit card at a later date, if any gadget or appliances has been purchased on finance using the credit card.

For more information on the pro’s and con’s of credit shopping, we recommend visiting Catalogues247 as they have discussed both sides of the argument in depth and also provide lots of guides and articles on related topics.

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