Interest free buying traps

[Russ]

Ran across this article and thought it was interesting, especially number 1.
http://www.walletpop.com/top5/traps-...ee-purchases-1

.#1 A Maxed-out Credit Line

With a buy-now-pay-later plan, the line of credit you receive typically equals your purchase. So when a shopper buys a $3,000 piece of furniture, for example, they often receive a $3,000 line of credit to pay for it.

The problem is, now the buyer has a line of credit that's maxed out. Making matters worse, the line of credit often moves in tandem with their payments. So when the consumer's balance drops from $3,000 to $2,000, the credit line drops to $2,000. Until the account is paid in full, that line of credit will remain at a 100% utilization rate.

This can be very damaging to your credit score. That's because your credit utilization ratio – or the amount of your debt compared to your total credit line – accounts for 30% of your credit score, says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling. To maintain a good score, she recommends that consumers keep their credit utilization below 30%. Click here to see other factors that affect your credit score.

[nodmicks]

I never knew that. Many years ago we financed furniture. 24.9% interest yikes!

[NikoSan999]

I've never had that happen with a buy now pay later. Up until now I've always had the buy now paid before the later ever started. Total amount divided by 11, 11 just to be sure.

But never with a pay later. Only credit cards...pay down and they keep lowering the limit. Who cares..not using anyway.

[Russ]

I've never had that happen with a buy now pay later. Up until now I've always had the buy now paid before the later ever started. Total amount divided by 11, 11 just to be sure.

But never with a pay later. Only credit cards...pay down and they keep lowering the limit. Who cares..not using anyway.

We do the exact same thing! Done a month before..just in case.

[homemaker66]

Great Information thank you.

[craftypam]

I've been doing this forever and NEVER been given only the amount that I purchased. I have always taken the amount and divided it by the amount of months that I have to pay it. Recently I bought furniture and they have made my payments exactly that way.