Hi all.. Although my credit is shot (and will be for quite some time), we are trying to slowly rebuild. My husband had horrible credit for years, but I think we are finally seeing the light at the end of the tunnel. We have been paying down cc debt and have been able to save enough for a long-desired laptop. My question -- is it worth it to apply for financing through Dell - and then pay it completely off? Or should we not risk the chance he will get declined and just pay for it with old fashioned cash? We arent sure if he will get approved or not, but we want to start the process of proving he is credit worthy somewhere. Thanks!
If you already have other credit cards, just focus on them for now. I'm not a big fan of retail credit offers, such as this one from Dell. They can have unintended effects on your credit score. So, since you have wisely saved the cash, make the purchase on one of your existing credit cards and pay off the balance in full. I'm not sure what kind of limit you have on your existing credit cards, but keep your credit utilization in mind too. If you have a really low limit, it's probably a better idea to just make this purchase in cash.
I don't think I would want to risk a turn down by Dell or anyone else at this time. I don't think that putting it on a credit card and then paying it down is such a great idea either. That would mean that your computer would cost more because of the interest. Let's say you are going to pay $1,000 for that new laptop and you have the cash to pay that amount. You have credit cards but due to your bankruptcy your interest rate on those cards is now at 29%. So do you really want to pay $1,290 for that $1,000 laptop just to hopefully help your credit just a teeny bit or maybe not at all? Doing that just don't make any sense to me. Now then, if you are willing to wait a few weeks more you can use the laptop money to greatly increase your credit score for a whole lot less money. Instead of paying as much as 29% and getting little or no increase in score why not pay maybe as much as 2 or 3 or 4 percent interest and get a huge jump in score as a result? The only difference is that you would have to wait another 3 months to get your laptop. If you don't want to wait the 3 extra months then I'd say that you should most definitely pay cash and be done with it. Lots cheaper than messing around with credit cards.
Thank you for the advice, Joshua. We don't have any available credit (other than store cards) at this time, so looks like a cash purchase is in our future. It actually feels good to be able to pay with cash!! Bill ... we have never filed for bankruptcy and had planned on paying it off immediately in full, which would eliminate the possibility of any interest. I just was not sure if there was a significant enough advantage to going the financing route at this time when it came to rebuilding. Sidenote .. I just want to say thanks to everyone that contributes to this forum. I came here a couple months ago looking for answers to one issue, but have been able to take so much more than that from everyone. Your time, advice and expertise is appreciated!
Credit ratings are usually built over a long period of time and although I may be wrong, to the best of my belief a sudden bump like that in a store card isn't likely to give you any boost in credit lines or scores. I think you are just as well or better off just paying cash.
Glad you've found the forum to be a help, and we hope to see you around often! As for this purchase, make it in cash. It would make sense to buy it on a credit card and pay it off in full if you had a rewards card with a higher limit and could bank points or cash back, but that doesn't sound like the case right now. Buy it with cash and enjoy the new computer!
