The ever changing world of high-tech gadgetry is just that — ever changing. Today’s “latest and greatest” is tomorrow’s obsolete and this plays a large factor in determining the best approach for saving up for a consumer electronics purchase.
In short, who wants to squirrel away hundreds of dollars over months for last year’s hot tablet computer or Android smartphone. They are taking pre-orders for the iPhone 4S and I want one now!
Same-as-Cash Payments Require the Same Discipline as Saving
One thing I’ve noticed over a full “career” as a consumer electronics and musical equipment purchaser is that making payments on a same-as-cash or no interest finance program takes the same amount of discipline as saving up for a hot gadget.
Most importantly using these same-as-cash finance programs lets me get my hands on that piece of gear months earlier than if I merely saved for it.
I can then use the same discipline in making monthly payments to ensure the charge is paid off before any interest is charged to my account. The best approach is to ignore any minimum monthly payment amount and divide the total purchase price by the number of months in the payment term. Pay that amount or a little more every month!
It is very important to keep track of any no interest program expiration dates on your monthly bill. They’ll also list the required amount to fully pay off the charge as well as the accrued interest which should serve as an incentive to not let the charge period expire.
Paying close attention to your bill is especially important when making more than one no-interest purchase at different times!
Various No Interest Payment Plans and Easy Pay Programs
Most consumer electronics retailers offer no interest payment programs. Best Buy generally offers 6-month no interest financing for all purchases over $149, and 18-month no interest financing for all purchases over $429. They also offer longer period financing, usually attached to bigger ticket items like HD televisions or kitchen appliances.
Another attractive alternative to same-as-cash programs are easy payment plans. With these programs, monthly payments are generally withdrawn from a consumer’s account by the retailer. It is important to use a debit card instead of credit with an easy payment plan to maintain financial discipline.
Music retailer American Musical Supply offers an easy payment plan where purchases over $1000 are made in five convenient payments. So a Moog Little Phatty II synthesizer from AMS requires five payments of $260 as supposed to the full list price of $1299.
Since making regular monthly payments takes the same effort and attention to detail as saving the same amount each month, why not treat yourself to that iPad 2 today instead of waiting almost a year! Financial discipline and no interest financing make it possible!