Vendors Offering Financing - Do You Support It?

[biggie4jets]

The way you are using credit cards is fine. My concern is people buying luxury items they cannot otherwise afford.

Agreed, but you can say that about anything not just within this hobby. The average American has about 8k in CC debt. It’s because we live in a society of “I want it now” and “I need this”. I’m not perfect at all, I’ve definitely done that and paid my fir share of interest, but no more. I was barely 20 and young and dumb.

 

[Jedi Knghit]

Agreed, but you can say that about anything not just within this hobby. The average American has about 8k in CC debt. It’s because we live in a society of “I want it now” and “I need this”. I’m not perfect at all, I’ve definitely done that and paid my fir share of interest, but no more. I was barely 20 and young and dumb.

I agree, and my opinion covers ALL luxury items, not just this hobby. I made a lot of dumb choices when I was younger too and it takes years to recover, even when the economy is good.

 

[Pickwun]

I think financing on reasonable terms is great. I have a limited budget for my hobbies. Low-interest financing gives me the option of buying better grade equipment that I would have to forego on a cash flow basis. If my return pump goes out it's not really an option to save for 3 months before I buy a new one.

 

[Viking_Reefing]

If you aren’t paying interest what does it matter if you finance or not? Even Amazon has no interest monthly payments when you checkpoint if you’re a prime member.

Also, if I’m buying anything these days it’s going on a CC to get those points.

I should also mention, you should be paying off your CC every month. You still get points and you still are able to have a debt free CC.

You are right about the no interest thing, but only if we ignore the fact that people’s situation can change unexpectedly due to outside factors.

For example, you may be able to afford the monthly payments now but who knows what will happen in six months? You may lose your job or something and now you’re stuck with monthly payments.

 

[KStatefan]

I do not care how other people spend their money.

 

[fish farmer]

Agreed, but you can say that about anything not just within this hobby. The average American has about 8k in CC debt. It’s because we live in a society of “I want it now” and “I need this”. I’m not perfect at all, I’ve definitely done that and paid my fir share of interest, but no more. I was barely 20 and young and dumb.

We also live in a society where people live and work to make money. I think of luxury spending all time, I used to hold out on items when I was younger in my 20's...do I really need this or that, mostly due to space, but also due to use. I was born in 1969, home computers were considered a luxury in the 1980's...internet..what's that...cable TV in the 1970's...you were rich. We had landlines and rotary phones and liked it, we used SASE's when we bought stuff out of the back of a magazine.

Fast forward to today...do I really need a computer and internet access? No longer considered a "luxury" item and a necessity in many regards.

I think of this whole hobby as a luxury item, although it is nice to see an economy centered around it since it may be someones only connection to nature and may help bring awareness to global fisheries issues.

 

[biggie4jets]

You are right about the no interest thing, but only if we ignore the fact that people’s situation can change unexpectedly due to outside factors.

For example, you may be able to afford the monthly payments now but who knows what will happen in six months? You may lose your job or something and now you’re stuck with monthly payments.

That's true, but you can say that about any reoccurring debt.

 

[NS Mike D]

Were you making this quip to clients? Did you not finance automobiles, or offer unsecured loans/lines of credit?

I did not loan money. I cleaned up failed companies that had borrowed too much.

I bought my first four or five cars with cash - great deals on used cars. My first financed car was 2002 chevy tahoe, but I don't consider zero percent financed. My second financed car was a year old car at purchase and a business car @ 6%, and the financing is accounted for as an ongoing expense.

In any case, the quip was just that. A quip about good versus bad credit. In the end, so long as it fits in your budget and your budget is sound a car loan is better than unsecured credit card debt because of the needs aspect of a car. IMO, a lot of people don't think through their options when buying a car and don't really know the details of their loans.

There is a lack of good financial education and too often professional advice is compromised by commissions/bonuses.

 

[NS Mike D]

Do you think that there is a difference between a vendor offering financing and a vendor accepting credit cards? If so, why?

in theory no, in practice, often, it is an an option for people who've maxed out their credit cards.

Also, the vendor lines usually include a sales discount. I've already mentioned the potential pitfalls that can wipe out the discount savings. Whether or not it's a good deal or bad depends on the individual.

 

[NS Mike D]

For those that dont know, Affirm, Bread, Klarna, Samsung Credit and many more store financing are classified as Consuner Finance Accounts (CFAs). They are classified as such due to high interest rates to high risk consumers and will remain on your report for 10 years. These types of account can impact you when you apply for certain loans from banks. Banks will see this when assessing risk.

If your credit score doesn't matter to you now, this is a minor issue and a major issue later. If it does, hopefully you find this information valuable.

For more info, google Consumer Finance Accounts.

excellent point. Know your lender. I had a dentist as a client and looking at why his credit score was lower than he expected, it turns out he guaranteed a loan for dental equipment (common for a sole practitioner to have to personally guarantee business loans) on an attractive financing offered by the vendor. Turns out the lender was a CFA and considered a negative on his credit score.

 

[NS Mike D]

I think financing on reasonable terms is great. I have a limited budget for my hobbies. Low-interest financing gives me the option of buying better grade equipment that I would have to forego on a cash flow basis. If my return pump goes out it's not really an option to save for 3 months before I buy a new one.

just throwing this out there, why not include in your budget for hobby costs, savings for equipment replacement. Say $20 a week. After a year with no unexpected hobby expenses, you would have $1+k set aside. Use your card for the transactions, but pay the card off in full from the savings and then replenish.


easier said than done, but the math doesn't lie.

 

[fish farmer]

just throwing thist out there, why not include in your hobby costs, savings for equipment replacement. Say $20 a week. After a year with no unexpected hobby expenses, you woudl have $1+k set aside. Ue your card for the transactions, but pay the card off in full from the savings and then replenished.


easier said than done, but the math doesn't lie.

When I was budgeting for my house purchase, I tracked my spending for two years. I was living how I normally did, putting $200 in the bank monthly and had an average of $60 monthly spending on the reef. This was actually a yearly cost spread out and I had done some upgrades at the time so it was fluffed.

 

[Pickwun]

just throwing this out there, why not include in your budget for hobby costs, savings for equipment replacement. Say $20 a week. After a year with no unexpected hobby expenses, you would have $1+k set aside. Use your card for the transactions, but pay the card off in full from the savings and then replenish.


easier said than done, but the math doesn't lie.

That's pretty much what I do anyway. I just said it gives me the option.

 

[BullyBee]

I say yes. I am all about personal responsibility. It’s a great way to establish credit. Plus, what is the difference between buying something on a credit card or using a stores credit?

You just have to be responsible. Just because you have the credit doesn’t mean you need to use it. So if you NEED a new wavemaker let’s say, go and get an Aqamai for $200, but don’t go get a $350 ecotech because you have the credit. Get two AI prime lights instead of getting that $1000 kessil.

That’s just me

 

[oneilwiz]

This is already an expensive hobby, I strongly agree we shouldn't be having this. If we cant afford it or save for it makes no sense. This will put reefers in serious problems especially for those who dont know where their priority is in this addictive hobby. Sure more products get sell, the manufacturer, vendor and credit company happy but we as the hobbyist will loose in the end. Seriously you can finance corals !!!

 

[MarineREEFpassion]

my respectful opinion: if one needs financing in this hobby, priorities seriously need to be reviewed.

But in the same sense if someone has been in the hobby, but is looking at a complete tank set up we all know that can be very spendy. What’s different about financing for this hobby and an out door sporting hobby where someone gets a loan for a snowmobile or quad? It comes down to being responsible and don’t get too far over your head with any finances. happy reefing.

 

[BurgerFish]

It's good. Ex: If your lighting fail, you can buy a new one right away with financing. Not everyone has 2000$ cash at any moment.

 

[Bill Hochmuth]

Recently purchased a Water Box 70 gallon reef and was offered a 0% interest payment plan. Better my cash stays with me.

 

[Duffybubbleboy]

Haha all you guys that used affirm just got taken.


Affirm is a complete scam. Why?? Because you can’t pay it with a credit card. You have have a large lump of cash to pay every month - miss one forget that interest free BS.. Straight to collections with you, now you are screwed with you’re credit and will likely pay double for your junk you should of just used a credit card for...


It’s bad for the consumer period - read some reviews on Facebook about affirm it’s a SCAM...

Instead of talking about something you know nothing about go do some research.. DO NOT USE AFFIRM- it’s not interest free, it’s meant as a way to catch your butt off guard so they can’t make double the profit. “Free - NO interest” yeh right that’s a verifiable lie...


I won’t be even buying from places that’s offer affirm any more sorry I actually removed some of the sellers from my usually list of suspect and block their Emails for their stores, I’m serious, it’s a predatory lending at its worst. It’s bad for any hobby or industry it touches...


Just use a credit card, if you can save up large chunks of cash to pay affirm at the beginning of the month - why use interest or affirm at all then ? Anyway I hope I save some of you a lot of hurt and financial pain and suffering. Do not use affirm people...

 

[Duffybubbleboy]

Why pay “interest” with a cash only option? It’s exactly what loan sharks do, it’s a trap, read some reviews... Save that money for two months or six months and just buy the stuff interest free, or use a credit card where you can make partial payments or use your other cards in a pinch.

Affirm is cancer, it’s the Rona virus, if you used it make sure you have that money ready or you will be sent to collections so fast your head will spin...

Do you think they are just giving interest free loans out and everyone is happy? heck no, affirm is a predatory lending service that is meant to hurt people that can’t pay the most and charge them the most. So if you can make the affirm payments- be smart and just save up the money...

Do you really want your credit ruined by affirm because say you can’t go to work because of an outbreak ? Do you think affirm suspended collections during this time people can’t work ? NO...


I’m saying all this just to give one of you enough info not to use it... if I can save one of you from the trap it’s worth all the ranting..