Buying on credit: what solutions are available to the consumer?

Do you have a project in mind, but do not immediately benefit from the finances necessary to carry it out? What options are available to you for purchasing on credit, and which method should you prefer? Our explanations. More commentary at http://barsugliafarms.com

What is a credit purchase?

What is a credit purchase?

It is simply a question of buying a good, but of paying for it only after having acquired it. If for example, you buy a television “cash”, it is not purchased on credit. If you pay for it with a Visa card, it is a credit purchase: you will only actually pay for this television when you pay your Visa bill. The advantage of buying on credit is multiple:

  • You do not have to pay for the goods directly: it is thus possible to obtain a good without having the necessary cash.
  • It is sometimes possible to pay for the goods in several monthly installments: this is, for example, the case with credits and credit cards.
  • Buying on credit can in some cases be more reassuring: you have the possibility of checking or testing the goods before paying for them.

What types of credit purchases are possible?

 

There are basically three methods to buy goods or merchandise on credit: use a credit card, pay by invoice, or take out a personal loan to finance your acquisition.

Payment by credit card

Payment by credit card

This is certainly the most common type of credit purchase: you pay for the goods from the seller with your credit card, and you later reimburse the amount used when receiving the invoice linked to your Visa card or MasterCard. Most companies that offer these cards also allow you to reimburse the balance of these cards in several monthly payments. Payment by credit card:

  • Is particular simple widespread: almost everyone has this means of payment.
  • Allows flexible reimbursement: it is indeed possible to reimburse the balance by several monthly payments (an amount of minimum 50 USD is in principle required).
  • Can be more expensive than other solutions: thus, in the event of payment by monthly payments, the holder of the card will pay an often important interest.
  • Is limited by the card ceiling: some very expensive goods exceed the granted ceiling, and cannot be paid by credit card.
  • Only offers limited protection against over-indebtedness, especially with the proliferation of cards that can be obtained.

Payment by invoice

This solution is sometimes offered by certain online sales stores. The principle is simple: you receive your goods at the same time as an invoice, usually to be paid within 30 days. This system:

  • Allows you to check the condition of the goods before paying for it
  • Allows payment within 30 days
  • Generally does not incur any costs or interest (except possible costs of reminders in the event of non-payment)
  • However, it is rarely offered by sellers, who take a risk by offering this type of payment.

Personal loan

Personal loan

It is also possible to take a personal loan in order to obtain the amount necessary for the purchase of the envisaged property. The goods are then paid “cash”, while you have a comfortable period (12 to 72 months) to repay your loan. Private credit:

  • Allows you to finance much larger amounts than other credit purchase solutions
  • Allows great flexibility and duration for loan repayment (12 to 72 months)
  • Remains relatively advantageous (the interest rates for private loans remain much lower than the rates applied in the event of monthly repayment of your credit cards)
  • On the other hand, it is necessary to take certain steps and to plan the time necessary for these steps: it is indeed necessary to consider the time necessary for the loan request, the sending of documents, and to wait for payment in case of acceptance of the file.

The case of leasing

The case of leasing

Note that leasing does not constitute a purchase on credit. Indeed, when taking a leased vehicle, it is simply “loaned” to the driver over a period equal to the duration of the contract. However, at the end of the contract, it is possible to buy back the vehicle at the cost of its residual value.

Which solution to prefer?

Which solution to prefer?

Everything will depend on the case. Generally, a credit card is enough for small expenses. For larger amounts, and especially if you plan to repay your acquisition in monthly installments, the private loan solution is then to be preferred.

To simplify and speed up the process, it is therefore advisable to contact an adviser or an experienced company such as Multicredit, which has been offering personal loans for many years already.

The process itself takes only a few minutes, and allows a response in the form of a non-binding proposal within 2 working days after the necessary documents have been sent.