Buying New Stuff

Open a bank account and save your $50 until you have enough to buy the TV. This will take a lot of time but it is the cheapest way to buy your TV. There is a big advantage to having a savings or checking account in a bank or credit union. (Credit unions are cheaper because they are non-profit organizations.)
• Savings Accounts: Savings accounts give you a place to keep your moneyand receive interest on it. You may have to pay a small fee for your account, but most accounts are free if you leave a certain amount of money in them (calleda minimum balance). You cannot write checks on a savings account, but you can take out money when you need it.
• Checking Accounts: Putting your money in a checking account andusing checks to pay your bills is safer than using cash and cheaper than usingmoney orders. Many banks offer free checking accounts, but you have to buy the checks you use. Remember that if you bounce a check (don’t have money in your account to cover the check), you will be charged a fee (often around $20) for each bounced check. Also, the store or person to whom you wrote the check might charge a fee.
Things to think about when picking abank:
• Will the bank cash checks for you? Check cashing businesses are veryexpensive. A family can waste over $400 a year in check cashing fees.
 Payroll and government checks are cashed for a 3% fee if over $500 or 2.5% fee if under $500.
 Personal checks (from a friend for example) are cashed for a 10%fee.
 You can save that money by using a checkingaccount.
• Can you have your check direct deposited there? If you don’t like to waste time going to your bank to deposit your payroll check, you can have ifdeposited directly. “Direct deposit” means that your employer or the government puts your check into your account automatically.
• Is there a monthly fee for the account? Is it less if you keep a certain amount of money in the account? How much?
• Can you use an ATM card? Where? What is the fee? ATM cards are a convenient way to get cash. Most banks will give you one if you have a good credit rating. If you take out more money than you have in your account, it will be like bouncing a check. If you use your ATM card at your bank’sATM machines, there will me no fee. But if you use your card and another bank’s machines, the charge is usually$1-2.
• How much does the bank charge for bounced checks?
• How much does the bank charge for money orders?

If you owe someone money, they can get a court order to “garnish” your account. This lets them take money out of your account without your permission.

Credit is when someone borrows money and promises to pay it back at a later date with interest. The interest will add to the total cost of your TV.
Advantages:
• Buy something without having the money at the time you want to buyit. Buy now, pay later.
• More convenient.
• Easier to return merchandise or get it repaired.
• Help with emergency expenses (for example, car repairs)
Disadvantages:
• Buy something that you really can’t afford and won’t be able to pay the bills when they are due.
• More expensive than using cash because you are charged interest.
• If late with payments, might give you a bad credit rating.

There are two ways to pay off your bills. You can pay the whole bill when it is due. Or you can pay over time. If you pay over time, you will pay interest on the money. Interest is the extra money charged by the lender for the privilege of borrowing the money.
Interest is referred to as the “Annual Percentage Rate” (APR) because it tells you the cost of credit for one year. For example, if the monthly interest rate is 1.5%, the APR is 18 percent. (12 months’ time 1.5).
The longer you take to pay your bills, the more interest you will pay. For example, two people charge $1,000 each on their credit cards. Both credit cards have an APR of 18 percent. Person A wants to pay this debt in one year, making 12 even payments. Person B chooses to pay only the $20 minimum required each month by the credit card. In the end, this is how much each will pay:

Yes if your credit card offers a grace period. You will not pay interest if they receive a your payment for the full amount before the due date. If you can’t pay the full amount, pay as much as you can. You will reduce the amount of interest charged.

Some credit cards also charge an annual fee. Shop around for a credit card to find one with no annual fee.

Credit insurance is sold to credit consumers. It pays off a loan if the consumer dies, becomes disabled, or loses employment. This insurance is very expensive and is rarely used.

No one has an automatic right to credit. Creditors will look at you, your credit history, and your current financial situation to decide whether to give you a credit card. Theywill want to know if you have a steady income and will be able to pay your credit card bills.
Creditors use different ways to decide whether to give you credit. One creditor might grant you credit, while another mightnot.

Yes. They cannot discriminate against an applicant based on sex, marital status, race, color, religion, national origin, age, or income from public assistance. The same standards must be applied to all applicants.

Yes. You must be told whether you have been approved for credit within 30 days. If you do not get credit, you must be told the reasons in writing. If you are denied credit find out why.

It is important to use credit wisely. When you use your credit card, you also build a credit history. Companies called credit bureaus keep information about you and how you use your credit cards and pay your bills. If you usually pay your bills on time, this information (called a credit history) can help you get more credit. If you have used credit poorly, this information will hurt your ability to get credit. Credit bureaus provide this information (called a credit report) to potential creditors.

Yes, you have the right to know what your credit report says. The credit bureau must help you understand your credit report and must provide this service free if you contact the credit bureau within 30 days of being turned down for credit, employment, or

Insurance because of information in your credit report. You an also get one free copy of your credit report every 12 months if youare:
• Unemployed and plan to seek employment within 60 days
• Receiving public assistance, or
• Your credit report is inaccurate.
To get a copy of your report, contact the credit bureau. The three largest credit bureaus are:
Equifax
1-800-685-1111
P.O. Box 105873 Atlanta, GA 30348
Experian
1-888-397-3742
Attention: NCAC
P.O. Box 949
Allen, TX75013-2104
Trans Union
1-800-916-8800
P.O. Box 390 Springfield, PA 19064

Be sure that your credit report is accurate. If it is not, you can ask to have it corrected by writing to the credit bureau.

Yes. Open a checking or savings account and use if very carefully. Apply for a credit card and make all payments on time. If you can‘t get a credit card on your own, ask someone to “cosign” for you on your application. (This means that they will be responsible to pay back the money owed if you do not pay it back.)

 

Rent to own companies target people who have a hard time getting credit. You usually do not have to make a down payment and they do not do a credit check. But by the time you finish paying for an item, you have usually paid two or three times more than the item was worth.

The following is based on 1997 information collected at various stores that sell TV sets.