| Chark said: So its less expensive, till its more expensive. |
If you're living on a tight budget, what is easier to manage? An outlay of $360 or an outlay of $100 with 24 - $15 per month payments?
In contrast, Wal-Mart and KMart charge a $5 fee just to place items on lay-away that you'll be picking up in two months. That would be equivalent to $120 over 24 months, yet people use lay-away all the time because it offers consumers a means of purchasing an items on sale without the full cash outlay at the time of purchase. Likewise, there are even worse deal in the Rent-To-Own business, where consumers are charged interest rates greater than 90%. Often tripling or quadrupling the initial cost of the item purchased.
The EFA is 4.5% per year, $1.61 per day, for a total of $38.74 at the end of two years.
- Better than a credit card - You pay $15.30 instead of $15.00, for 4 years instead of 2, for a total cost that's nearly $300 more.
- Better than lay-away - You pay $45.62 per week instead of $3.75, and you have to wait before you can take home your purchase.
- Better than Rent-To-Own - You pay 92% or more over the term of the contract rather than 9%.
- And for budgetary reasons, better than an outright purchase - Your inital cost is $360 rather than $100 and at the end of one year, you've paid more than through installment payments.
