Buying on Credit

Started Jul 9, 2012 | Discussions
Nazeer Halawani
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Buying on Credit
Jul 9, 2012

What do you think on buying on credit?

My budget is strictly tight, but my position allows me great credit opportunities.
What would you go for? Tiny gear for cash? or Extended gear on credit?

PS: it's not for professional/commercial purposes, though i'm considering doing some commercial photography in the future.

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happysnapper62
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Re: Buying on Credit
In reply to Nazeer Halawani, Jul 9, 2012

Although I have not yet done it, I would always consider interest free purchases over say 12 months. I am actually thinking of buying a Canon 70-200 f4 IS, as one retailer may be having a IFC option soon. I am bad news for credit card companies, as my bill is paid off as soon as it comes in. I have never paid credit card charges & don't intend to start now. lee uk

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Nazeer Halawani
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Re: Buying on Credit
In reply to happysnapper62, Jul 9, 2012

which is the right thing to do as far as i know.

But as soon as a crucial progress in gear becomes a necessity, all we have left is credit and interest rates.

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AdamBird
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Re: Buying on Credit
In reply to Nazeer Halawani, Jul 9, 2012

I recently purchased a lens on credit. It was a Canon 135mm f2.0 L lens for £900. In the UK, I managed to get an interest free credit arrangement whereby I payed a small deposit and then monthly installments of £70. This was certainly the only way I could afford that lens at the time. I am just a hobbyist, but sometime there are shots you just cannot get with a budget lens.

For me, if you can afford the monthly repayment and it is a lens that you definitely want then why not?!

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Nazeer Halawani
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Re: Buying on Credit
In reply to AdamBird, Jul 9, 2012

actually my friend it's much more than a lens. I'm looking for a full renovation

A new camera and a set of lenses. a total of probably 3000USD. Still confused though..

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RobertLaw
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Re: Buying on Credit
In reply to Nazeer Halawani, Jul 9, 2012

Buying on credit is usually not a good idea. It has ruined the credit rating for many. About the only things that are worth going into debt on are a house, education, and sometimes a car.

Even if you have an interest free loan and you think you can squeeze out the cash flow, you should look at what the contract says. Often they defer interest and if you don't meet your payments then you are stuck paying the interest. Image buying a lens for $1500.00 on a contract with no interest. Say you miss or are late on you last payment. All of a sudden you have about another $600.00 tacked on to the load at 29% interest. This is an actual scenario.
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CliffB
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If you have to ask, then NO.
In reply to RobertLaw, Jul 9, 2012

I agree with Robert as to the potential problems that can be caused by the misuse of credit.

As far as the OP's original question, the fact that you have to ask whether or not using credit is a good idea, indicates that the answer for you is that it is not. You have answered your own question, merely by asking.

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Nazeer Halawani
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Re: If you have to ask, then NO.
In reply to CliffB, Jul 9, 2012

lol that was neat! actually yes, i'm intimidated by credits and loans, especially in regards to photography. but on the other side i'm eager to possess all that great gear. It's right in front of my nose otherwise I either have to wait or settle for a modest gear.

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carl english
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Re: If you have to ask, then NO.
In reply to Nazeer Halawani, Jul 9, 2012

NO! No! No! If you cannot afford an item then thats it, go without or save. As has been said, if you miss a payment, you may lose you job or become ill it could become very stressful, millions take on credit and are fine but most of the people I know keep adding to their debt because its so easy. I would like a Daimler and Fly first class everywhere but alas I cannot, so its the cheapest flight available and an old banger, result I'm happy.

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Nazeer Halawani
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Re: If you have to ask, then NO.
In reply to carl english, Jul 9, 2012

hehe. you made me smile, an added value that is
I'm convinced. No credit, no new gear until I save. Done
Thank you everyone, I wish others could benefit from the said advice.

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Simon97
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Yes!, But...
In reply to Nazeer Halawani, Jul 9, 2012

Buy with credit card but have the money saved to pay it off in full when your next statement arrives. Doing this will help your credit score. Using the card and not paying the full balance can get expensive in the long run. It can be addictive and lead to financial problems down the road.

I use my credit card for my small business and I'm paying off the balance every month which is around $1,000 each time. My credit score is over 800.

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DuaneV
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Re: If you have to ask, then NO.
In reply to carl english, Jul 9, 2012

I was raised that if you didnt have the cash to pay for something, you didnt need it. A house or car included. Well, I have a mortgage and Ive had vehicle payments. Ive also had small personal loans. But when it comes to using a credit card to buy "luxury" items like clothes, a TV, going out to eat, toys, etc., I dont believe in it at all.

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a1shot
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Re: Buying on Credit
In reply to Nazeer Halawani, Jul 9, 2012

Nobody here will make your payments! You Decide...

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Ima' nice kinda guy!

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scorrpio
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Re: Buying on Credit
In reply to Nazeer Halawani, Jul 9, 2012

There is only one case when credit makes sense: if you can invest your money at a better rate at the time.

Say, you have $3000 in an interest-earning account, and you can put additional $500 in there each month. If you buy something for $3000, which will empty the account, and will take half a year to restore to its earning ability.

But, suppose you can buy on credit, and pay for it in 6 months, interest-free. You keep the $3000 in the account, and just make payments, whyle your money earns interest, so you end up in the positive. Should something happen to your earning ability, you have the reserve to pay off the credit.

As additional bonus, taking out credit and paying it off properly builds your credit history.

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jon404
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Re: Buying on Credit
In reply to scorrpio, Jul 9, 2012

I think I'd ad another case for credit -- if you are starting a business and need to buy a tool (camera, lenses, tripod, etc) that will help you make money.

The obvious business case is: 'How long will it take to get my money back?' This is also called ROI... Return on Investment.

For an amateur or a hobbyist, all the above credit warnings certainly apply -- particularly as they relate to credit cards, which are vicious. If you must borrow, go directly to a bank or credit union and take out a signature loan at a fixed rate of interest. NEVER borrow at a variable rate!
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Peter A. Stavrakoglou
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Re: If you have to ask, then NO.
In reply to DuaneV, Jul 9, 2012

DuaneV wrote:

I was raised that if you didnt have the cash to pay for something, you didnt need it. A house or car included. Well, I have a mortgage and Ive had vehicle payments. Ive also had small personal loans. But when it comes to using a credit card to buy "luxury" items like clothes, a TV, going out to eat, toys, etc., I dont believe in it at all.

It's not easy for many of us to have the cash-on-hand for a house, especially in areas where the average cost of a home is over $ 300,000.00. The same for a car in some cases. I am in the same place as you. We have a mortgage and one car payment but nothing is bought on credit otherwise. We do use a credit card for just about every purchase but that is for the airline rewards. We never pay interest on our credit card balance, it is always paid entirely every month.
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NormSchultze
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Re: If you have to ask, then NO.
In reply to Peter A. Stavrakoglou, Jul 9, 2012

If you 'manage' your cards, you can also get up to 5% cash back. Just pay 'em off at the end of the month.

And, if you get into a dispute w/merchant, the card company will help. Ditto with 'mistakes' from merchants.

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I Cant Believe Its Not Butter
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Re: Buying on Credit
In reply to jon404, Jul 9, 2012

I have an American Express card. It pays cash back every year. 1% for most purchases, 2% for travel, and 3% for gasoline. I still have to purchase things, so I charge everything then pay it off at the end of the month.

Come February, I get a nice check without having to pay interest. Now if I make a big purchase for a Camera or something else, I will pay it off over time and then I get stuck with interest payments.

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I Cant Believe Its Not Butter
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Re: If you have to ask, then NO.
In reply to NormSchultze, Jul 9, 2012

NormSchultze wrote:

If you 'manage' your cards, you can also get up to 5% cash back. Just pay 'em off at the end of the month.

And, if you get into a dispute w/merchant, the card company will help. Ditto with 'mistakes' from merchants.

I was traveling in the Philippines during May and I stayed at some dump of a hotel. Paid for 3 nights but checked out the next day. Owner refused to give me a refund. Called American Express, 30 days later they refunded the other 2 nights I didn't stay in that bug infested hotel.

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Ron Poelman
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Never.
In reply to Nazeer Halawani, Jul 10, 2012

Yesterday's technology at tomorrow's prices ?
It's all out of date the day you walk it out of the showroom.
It's about the image not the gear, so, run what you brung.
Money doesn't buy happiness and it sure as hell doesn't buy talent.
Really, since when did scrounging become unfashionable ?

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