I entered the gadget hub and was surrounded by three people, a man and two ladies. One held my arm, one held my shoulder and another held my shirt tightly. They were leading me to the "Easy Buy" section. They wanted me to buy a smartphone and pay back in 6 months.
Why would anyone beg others to purchase their goods on credit? You might ask. Well they make a gain of over 30 percent extra, and you can't really run with their money since they have all your information.
Some might think this is a great idea for the masses. But is it really? No matter how sugar coated getting in debts might be presented, it is always better and cheaper to pay cash. And for good reasons.
The idea of buying now and paying later just means going into debt. People buy things they can't afford at the moment and it is paid from the future earnings of the individual, money he does not have but expects to earn. That is why there is always a problem if workers earn lesser than expected of lose their jobs altogether. They will be unable to pay and this will lead to the creditors repossessing the things they purchased. Hence, bankruptcy starts smiling at the debtors.
Not only do people buy what they don't need but they also lose money. Of course, they have to pay more for the product because of interest charges.
Money lending is a lucrative business. In fact, companies do not want customers to pay cash, because of the huge profit they make on the interest on debt payments. Some even make more profit on the interest than they would on the item itself! Let us consider an example.
The gadget I wanted to buy was $100, but if I go with easy buy it would be $125 for a duration of 6 months. Imagine what I could do with $25? If I purchased on credit, that means I tore $25 and scattered the pieces on a flowing river.
The best decision
I had my money, so I didn't listen to them. Why go into debt when I can actually afford the product?
Have a balanced view of material things and don't purchase what you can't afford. If you need anything that is costs a lot, plan ahead by saving for it.
Never let a seller pressure you into debt by telling you about ‘Easy Credit.’ There is no such thing. All credit is hard. Ask anyone who is now unable to meet payments or who is having to declare bankruptcy and make your findings.
Indeed, it is always cheaper to pay cash.
Posted Using LeoFinance Beta