The Pros And Cons Of Children’s Furniture Financing
Children’s furniture is oftentimes expensive and parents can expect to spend hundreds of dollars on a simple bed frame and mattress. Financing, for this reason alone, is oftentimes an attractive option, but not without its pitfalls. There are certainly numerous advantages to financing furniture for children, but parents will also discover that not all options are appropriate for their needs. Below, we will discuss how certain financing options impact personal finances!
What Does Furniture Financing Entail?
Whenever anything, including furniture, is purchased on the personal credit, it is called financing. The most common options for financing furniture for children include layaway plans, credit cards, retailer financing, and rent-to-own.
The Advantages And Disadvantages Of Layaway Options
Many parents find layaway options ideal because they require a small upfront downpayment for the furniture and they can easily pay off their debt over weeks or months. The furniture is owned by the seller until the layaway plan is paid off. During this time parents can pick up the children’s furniture.
Though highly attractive as an option, layaway plans do have a serious setback. For example, if the plan isn’t paid off by the projected date, all funds and the furniture itself are forfeited by the buyer. Additionally, there’s always the running risk of the retailer disappearing or going out of business once the layaway is paid off.
The Advantages And Disadvantages Of Credit Card Purchases
Credit cards are a popular option for purchasing children’s furnishings, but credit isn’t necessarily the wisest option. The real advantage of this financing offer is the ability to take the furniture home straight away versus having to pay off the debt first. Additionally, there’s a certain amount of purchase protection that comes with selecting credit cards.
The real downside of this method is the high-interest rates charged by creditors. Oftentimes, in-store financing or even a personal loan yields much more affordable results than racking up credit card debt. We highly recommend that you purchase Personal Tradelines, as it is an effective way to improve your credit.
The Trouble With Rent-To-Own Financing
Rent-to-own lease agreements are perhaps the only real option available to those with no credit or poor credit history. This option allows parents to get the furniture they need for their children even if their finances are looking poor.
The real dark side of this option, as attractive as it may seem, is the overall amount of money parents are forced to pay back. Oftentimes, rent-to-own options charge double for their furnishings than what it would cost to simply save up the cash.
Is Retailer Financing A Good Or A Bad Option?
Most sellers that specialize in furniture will offer in-house financing options. Sometimes, they may even provide a 0% down option and incentives if the debt is paid off quickly. Out of all of the options mentioned above, this one does yield the best and most affordable results as long as regular payments are met.
The only real pitfall with this form of financing is the interest rates. Parents may get slapped with up to 20% in interest charges over time. Additionally, the furniture store can repossess the furniture if payment defaults at any time.
At the end of the day, cash is the best option for financing furniture. But it does little in the way of building personal credit. It’s important to consider personal finances before exploring any of the above options more in-depth.