In life after bankruptcy it’s inevitable that you’ll need to make a big ticket purchase. And one of the most common things you’ll need to purchase is an appliance. Whether it’s a refrigerator, stove, or washer, you’re eventually going to need to replace it. But it can cost you thousands of dollars when buying appliances, so you’ll probably need to finance. Below are a few tips on getting the credit you need to purchase household appliances:
Be Practical
There are a lot of appliances out there with all the bells and whistles, but do you really need them. Determine the absolute minimum number of features you need and try to find an appliance that fits that profile. For example, if you’re a single person living alone, you may not need a large refrigerator. You can save a ton of money buying something a lot smaller. And you’ll make it easier to find financing if you need it.
Use Credit Cards
If you have a secured or unsecured credit card after bankruptcy, you can use it to purchase your appliance. Many credit cards even offer extended warranties for appliances at no extra cost. Just make sure you confirm with your credit card company that an extended warranty is available. You may want to proceed with caution as many credit cards have very high interest rates which can drive up the real cost of your appliance. So it may not be wise to use your credit card to finance an appliance purchase if you can’t immediately pay off the debt—before the next billing cycle.
Use Store Credit
Some companies offer in-store financing that is relatively cheap and easy to use. An interest rate of around 13% is common and oftentimes significantly cheaper than credit card interest rates. If you’re applying for store credit, ask about what kind of warranties are included, but don’t purchase any warranty that’s shorter than five years. Most appliances won’t have repair issues until after three or four years.
Short-Term Only
When financing an appliance don’t enter into any credit agreement that extends longer than three years. Since many appliances break after four years, you don’t want to end up paying for an appliance loan and an expensive repair bill at the same time.
Before agreeing to any loan for a new appliance, shop around and try to find a lender with the best terms and interest rates.
