Caveat emptor, “let thee buyer beware”

This weekend we got into an interesting discussion about various payment plans on purchase of furniture,etc. One of the purchase plans we often come across is ‘You sleep free on the mattress for the first year’-plans where buyer does not pay anything for the first ‘x’ period and then makes full payment or pays in installments.
And I was surprised to know that such payment options have adverse effects on one’s credit history.
Does anyone knows more on the cons of such plans or has anyone burnt their fingers with such plans.

2 Comments:

  1. BhaveshG
    September 15, 2008 at 10:32 am

    Unless you violate/not pay-up depending on the credit terms – how would it have adverse effects on credit history ? Just getting into the payment plan would not effect the credit history.

    If you are paying up your credit card every month in full – this type of plan should be of advantage. You do not pay (or pay minimum depending on credit terms) for “x” period and then pay it up in full once the “x” period expires. The only risk is if you do not pay up in full at the end of “x” period, you will be charged interest from day-one (as when u purchased or entered into the credit plan contract which includes the interest during the “x” period also). Read the fine print on your credit terms 🙂

  2. Ameeta
    September 15, 2008 at 11:46 am

    It can have adverse effect on your Debt-to-Credit ratio as long as the debt is not paid of, which in turn will affect your credit score.

    http://www.debtsteps.com/credit-to-debt-ratio.html

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