Please Donate Toward The Purchase And Keep FR Up And Running!
Posted on 02/20/2012 11:36:50 AM PST by Altariel
Dear Dave,
My wife and I bought some furniture a while back on what we thought was a 24-months-same-as-cash plan. The original purchase price was $1,600. The other day, I got a call from a collector saying that it was actually a 12-month plan, and the balance is now $2,800. We looked at the contract, and it was our mistake on the length of the plan. Still, that makes the interest rate about 30 percent. Is there anything we can do about this?
Robert
Dear Robert,
This is one of the reasons I tell people to stay away from “same as cash” agreements. You may not have agreed to a specific percentage rate, and I’ll bet it’s something less when you factor in the time before and after the 12-month period ended. Still, I’m pretty sure that when you signed the contract you did agree to have this thing convert to a financed contract if you didn’t pay it off in 12 months. These kinds of deals are really scummy. Not only have they charged you interest since the 12-month period ended, they’ve also back-charged you interest for the entire length of the contract!
These same-as-cash contracts are a bear trap. They’re designed to mess you over big time. You can try to dispute it, but I’ve got a feeling you’ll lose and have to pay about $1,200 in stupid tax on this one.
Lots of people think they can pull one over on a company with the “same as cash” deal, but stuff almost always comes up—even if you don’t misread the contract. I’ve said it a million times, Robert. If you play with snakes, you will be bitten!
—Dave
Dear Dave,
I’ve heard you talk about something you call the legacy drawer. What exactly is this, and what goes into it?
Lisa
Dear Lisa,
One of the best ways I know to tell your family how much you love them is by having your financial act together and organized in a central location. The Legacy Drawer is a collection of your essential financial documents in a safe place where they can find them when you die, or if you’re sick or disabled.
All of the pieces of your financial life should be in this drawer. I’m talking about your will, living will, estate plan, investment statements, insurance policies, and property deeds. You should also include stuff like power of attorney statements, access information to lock boxes, and other instructions to family and loved ones.
Make sure it’s really well-organized, too. It should be laid out simply enough that anyone who can read could open it up and find exactly what’s needed in just a few minutes. The stress of having a loved one die or become seriously ill is bad enough. You don’t want to make it any harder on them by leaving your finances in a mess!
—Dave
* For more financial help please visit daveramsey.com.
I’ll agree. Same as cash is stupid. I bought my wife a $2500 tennis bracelet for our 20th 3 years ago on “same as cash” for 12 months. I was late by 2 days on one payment and interest was added automatically. Ended up costing me $2800.
I bought an LED TV from Best Buy on January 29th 2011. Term 48 months no interest. Deferred Interest is currently 317.02 @25.24% and it’s over half paid off.
I love Same as cash. Loved it better before the government stepped in and required min payments. Every stick of furniture in my house was bought same as cash. The store we use does not start interest until your initial term ends.
I prefer to call same as cash home layaway.
Safety deposit box with a revocable trust. A revocable trust is pretty standard in format in what is required, your add the particulars. I used LegalZoom.com added the above-will, investments, insurance- into a nice and tidy financial information package location. Came in a nice leather like bound binder,name on bookplate on front. Ran it by my attorney and she was impressed. Cost me around $250 and not $1500-- which an attorney group I was referred to as specializing in trust preps; plus they wanted to guide my investments [in the first few minutes of our meeting] into a local bank they thought would do a better job before they even knew what Financial Group I use..or even knew my financial/growth history. I didn't call back. That is how I came to use Legalzoom.com. Standard revocable trust with will, accounts etc which can be updated. Safety deposit box-safe and sound.
Dave still on the networks, noticed he was gone from FOX Business; but how many times can you say the same thing over and over on what should be logical thinking when it comes to spending, wants, needs =debt.
Reminded me to update a page in the trust and the will.
I don’t see the issue here. Be clear on the term. Don’t be late on payments. It’s not hard.
I guess it comes down to a difference in financial planning philosophies. :-)
A bank with a decent online bill-pay service can come in handy here. Make sure the funds are on deposit. Then you can schedule payments to be made at specific times in the future, so you won't forget and run afoul of the rules.
Thank you for the tip; I’ll have to keep that website in mind.
Make copies of everything in your “legacy drawer!” Put them in a safe deposit box or something. I’d hate to be so vulnerable to have all my important papers in one flammable, insecure location.
these are gifts that can save you lots of money...
for instance, I've currently got a no interest "loan" from a credit card company for one year...put all that down on my HELOC....so even though my HELOC interest is not much...3.25%....I'm still saving that...and I pay on the "loan" every month and won't go beyond the year.....I'm very careful on this....
sure...3.25% is not much to worry about, but its probably 3% higher than any savings account....
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