Oh hello. Didn’t see you there. I was just watching my favorite show. But hey…are you looking for a new TV to watch YOUR favorite show too? I’m looking to upgrade to a 4K HD Smart TV, lemme tell you, they’re niceeee, and I’ve been looking at one from Best Buy. So, let’s talk about what a TV purchase from this retailer could look like.
If you’re new to the show, this isn’t the part where we try to sell you on a deal. Instead, we’re just using an existing deal as a teaching moment, so you guys know how to dissect and research these types of purchases before committing. So, without further ado, this is Can I Afford This…TV?
Tip #1: Search for the Best TV Financing Option
So this is a 65” 4K UHD TV from Best Buy that retails for $477.99. While this guy’s not the most expensive model out there, I totally get that not everyone has 500 bucks sitting around to pay for a purchase like this in full.
It’s the holidays, so you’re already getting a discount at most retailers, and this one’s $52 down from $529.99. So definitely remember to shop around for deals!
If you’ve watched our show up until now, you’ve probably noticed that we don’t talk about buying anything in full. Instead, we break down your financing options. Reason being…that’s where you can get into trouble.
Tip #2: Read the Fine Print
It’s super tempting to just click “yes, I’ll take this for option 2…$39.84/mo. for 12 months” because it seems cheap, without really considering that you’re locked in for a 12 month subscription, essentially. The only way to get this deal at Best Buy is to sign up for a store card…and you guys know how we feel about those…So, we clicked on “show me how” and saw that this deal does not only have low monthly payments, but is also interest free if you pay the balance in full within the 12 months, and if not, you’ll be charged interest from the purchase date if the purchase balance is not paid in full within 12 months.
That’s usually standard with store card deals, but you definitely don’t want to be stuck paying more. You’ll already pay more than the offer initially states, because it doesn’t figure in taxes or shipping.
So we dug a little deeper into the terms themselves for this store card offer and found this…”Monthly payment stated is only an estimate based on listed purchase amount excluding sales tax, and does NOT include additional payments that may be required for an existing balance. In order to pay your promotional balance by the end of the period you may have to make a payment each month that is higher than your required minimum payment.”
Tip #3: Don’t Make “Minimum Payments” on the TV
To simplify: You know you can pay the “minimum payment” each month to pay down a credit card and not get reported to the credit bureau as a missed payment. But that minimum is always less than the balance. So, say you have $1000 on your credit card that you have to pay off in 12 months. Your minimum payment is $75. If you only made the minimum payment for 12 months, you’d be $100 short at the end of the term and don’t satisfy the promo offer, meaning you didn’t meet the requirements to get the deal and you’ll be getting those monthly interest charges on top of the $477.99 + shipping + taxes.
For example, if you bought something for $162 at a 6-month term with monthly payments of $27 and a potential 26% APR, not completing your payments by the end of the term incurs an interest fee of $31. So, you’d actually pay $193 instead of $162. On top of this, for any missed payments you may also get charged a late fee of up to $40.
Remember: No Debt, No Sweat!
Bottom line, we approve of this $39.84/mo for a 12 months purchase plan. It’s more than manageable and something that can fit into most budgets. If you’re concerned about any of the pitfalls of putting this on a store card…maybe because you already carry a balance or paying higher APRs than a regular credit card…find a cheaper option that you can pay in full. No debt, no sweat!
DM us your store card stories or let us know your thoughts in the comments below. Thanks for tuning in to Can I Afford This…? We’re doing these all throughout December, so if you have a household item purchase you want a closer inspection for, let us know about that too.
We’ll see you next time!