Credit card question

[Feather1414]

Now first of all, I want to say that I really don't like Wal Mart at all, but considering my boyfriend and I have been saving for a tv for quite some time now and they have the cheapest one of the model we want, it's hard to say no to shopping there.

Anyway, when we were looking today we saw a sign by the tv offering the Wal Mart credit card. I know little to nothing about them. I own one, pay it off in full every month and thats about it.

The sign stated that the card would allow up to purchase items before May 21st 2010, then then no interest for 12 months as long as the purchase was more than $299.

http://www.walmart.com/financing

Well the tv we want is currently at $398 and we can more then make the minimum payments as it would be about $40 a month, or $20 per person. We did the math if we bought everything taxes included for $450.

My question I suppose is if we put the tv on the credit card and did make all the monthly payments, would we really not be paying interest, or will there be a large finance charge if we are paying the miniumum balance each month. Are interest and finance the same thing? I don't think so...

Would you put it on the card, and then build up some credit over the year, or just pay cash and buy it in whole? We wouldn't be using that card for anything but the tv and then afterwards it would be canceled.

 

[Horse Feathers]

Get the card and get the TV. If you pay on it for 6 months- no finance charges, builds credit

 

[KanoasDestiny]

I just did this with my Best Buy card. I bought a new laptop in April for $800. The deal was...make a purchase for over $400 and you get 18 months interest free. While I did have the money to pay outright, I decided that I wanted to keep the cash on me instead and to use the card.

I received a bill every month for $10. I paid more than the minimum due, but had I just paid the $10 a month (which they hope you do), by the end of the 18 months, I would have only paid off $180. The catch was...I was accumilating interest for every month during those 18 months, and had I not paid it off fully within those 18 months, then they would have charged me that accumilated interest on my 19th bill. Also, if you are late or miss a payment, you also have to pay that interest, along with any future interest (it voids the deal).

I don't know if Walmart's offer is the exact same, but it sounds very similar. Make sure that you read all the fine print before going into it. But in my case, it was a great deal. I made my last payment in October, so instead of handing over $800 in cash at the time, I got to make payments interest free for 6 months.

 

[Minimor]

Read the fine print closely. All the store cards can vary as to what you actually pay on them on those deals. Some have an administration fee put on up front. Some (maybe most) as mentioned have a large amount of interest added on if for any reason you're late getting the final payment made. I don't do store cards and haven't even read any of the fine print on the offers in the flyers in a long time--I used to read through some of them & thought you've got to be kidding, people actually go for these "deals"? Some aren't so bad, others are a rip off--I haven't looked at Wal-Mart's at all so don't know where they fit in.

Have to say though that I think most times it's better to stay away form the store cards. It's better to pay cash. You know, sometimes you can go to a store that's offering 'do not pay for 15 months' or whatever deal they're advertising and ask if they'll give you a better price if you pay cash. Sometimes you get a good deal that way, sometimes it's not a great deal but they do give a cash discount--not sure that would work at Wal-Mart, but some stores definitely do it. Save up for a bit & then buy!

 

[Rocket's mom]

I do these kind of deals quite often. I've never had a problem with any of them. Just make sure to pay it off before the 12 months or 18 months is up. I always try to have it paid off the month before the end of the deal, just to be on the safe side. And it does help build your credit rating, which is a nice added bonus!

Janie

Star Hill Farm

Proud owner of Boones Little Buckskin Rocket

great-grandson of Boones Little Buckeroo

 

[Bunnylady]

Did you read the offer you linked to? It says that, if you don't pay off the TV within the 12 months, they may charge you 30% interest on it (that's what they'll charge you if you get behind in your payments). You only get to do this interest-free deal on one purchase, and they also state that any purchases after the initial promotion will be charged 14-23% interest (most likely depending on your previous credit history, I wonder if anyone ever qualifies for less than 23%.) Only you can decide whether you are comfortable paying those sorts of interest rates, but I suspect you can do better. If you think you have the self-discipline to cancel the card, that's one thing, but Wal-mart is counting on you hanging on to it or at least using it before the promotion purchase gets paid off. I say, use caution.

 

[Annabellarose]

When you cancel a credit card (even if you did not miss a payment, etc.) it HURTS your credit score. Get the credit card, buy the television, pay it off before that date, then use it wisely in the future.

Also, paying your credit card balances off every month does keep you from paying many or any finance charges, etc., but it does NOT raise your credit score. Of course it is not good to "max out" all of your credit cards, but one of the best ways to raise your credit score is to prove that you are a good credit risk to lenders. They want to loan money to responsible people that will pay them back, but over time.

 

[Littleum]

I wouldn't do it.

Creditors look more unfavorably on merchant credit accounts (Walmart, JC Pennies etc) then just your standard Visa/Amex/Discover (not all credit is equal, just like not all debt is equal... debt like student loans or a mortgage are not dings, but a huge Visa balance IS) . And merchant credit accounts are notorious for being terrible the instant you have a small mis-step.

You also can't close the account once it's opened without taking a ding on your credit. That's the great irony of having cards. Your score gets calculated based on avaliable credit, and if you close down a line of credit, your score takes a hit because your avaliable credit has gone down. It's a lovely catch 22. You won't do yourself a single favor with your "buy it, pay it off, close it down" plan. Ironically, it's better on your credit report if you have a $30,000 limit and are carrying a $2,000 balance then if you have a $500 card with $0 balance. It's better that you have a revolving debt load that's 10% of your income then to have 0% debt load and no credit history at all.

And the flipside to that deal, SHOULD anything in your life go wrong, is pretty nasty. 30%? Subsquent purchases at 18%?+ You can bet there are nasty late fees and overage charges. Yikes!

 

[Shari]

Right now.. I would stay away from CC. Those companies have free rein on what they can charge and they don't have to honor their contracts.

Would be better if you get a fixed personal bank loan and paid that off. The % rate would stay the same and it would help you build your credit in a more postive manner.