My mother bought a refrigerator

[keithbvadu2]

My mother bought a refrigerator from some appliance store in the nearby big city. After 2 or 3 payments, she noticed that she owed more than the original balance. The payments were set up to be slightly less than the interest accrued. It was designed to be an everlasting loan where you paid interest only but not quite enough. She was in her 70s, maybe 60s. She got rightfully p_ssed off and paid the whole thing off. The refrigerator itself was fine but the finance plan was sleazy.

[Swede]

1. Those rent to own places do that too.

You wind paying ten times the value of the unit. If not more.

[David__77]

4. Rent to own, "payday loan" and other tactics to rob people...

Terrible and should be tightly regulated in terms of labeling and advertising as well as what rates are charged.

[Hugin]

7. "Rent to owe" is always my reading of those ads. n/t

[PatrickforB]

2. Geez, just when you think you've seen it all, here's this new and odious form of grubbing for ever more PROFITS.

Sigh.

Watch out.

[ihaveaquestion]

9. It's definately not new. It's been the payment method of choice for generations.

[Shermann]

3. I believe credit card minimum payments have to cover all interest and a small amount of principal

There were reforms to credit cards in 2009, but I'm not sure about these types of loans. It does sound like a predatory loan.

[GiqueCee]

5. Wait...

... you were expecting corporatists to be honest? Ummm... no.
They get demerits for honesty. Whenever you enter a transaction with a corporate entity, top of mind should be not what they can do FOR you, but what they intend to do TO you. As Tom Waits so sagely observed, the large print giveth; the small print taketh away. Words to live by.
Remember the Enron creeps that joked about little old ladies freezing to death because they manipulated power outages? (NOT a hypothetical; little old ladies did freeze to death!) That is the distilled essence of the corporate mindset. Assume the worst. Then double it. You're getting warm.

For the record: I started working with, and for, corporatists in 1965. I know whereof I speak.

[multigraincracker]

6. I love to and learned to always

Tell them to give me a copy of the contract to run bu my lawyer. Need to take some photos of their faces when I say that.

Give it a try especially with bids from contractors with long term warranties mentioned.

[homegirl]

8. In Britain

they called it the "never, never" plan. You never finish paying!

[twodogsbarking]

10. There are laws against predatory lending practices. If this isn't one it should be.

[lastlib]

11. I've seen credit cards that charge you a fee every month that you DON'T go deeper in debt to them....

I'm pretty sure that's illegal now, though. The tricks they use and have used to trap people in debt are utterly outrageous!

[COL Mustard]

12. Credt card companies have one job.

To get you into debt and keep you there. Preferably for life.

[Warpy]

13. If the number of payments wasn't specified,

it might be time to alert regulatory agencies and the media about a scam going after the elderly.

[appleannie1]

14. Sears credit card was like that.

My husband's first wife handled the money. When they divorced, he found out he owed credit cards he had never heard of and everything was up to the limit. When we married, he insisted on handling the money. Once he got his credit cleared up he bought some appliances from Sears on their credit card. I never saw any of the bills, nothing at all that had to do with money,. One day I happened to notice the Sears statement on his desk. By then he had bought a lawn tractor and a number of tools and a radial arm saw. I just happened to notice the amount was higher that month than it had been the month before. It was only a couple dollars but still. He was only paying the recommended amount of the bill. They were adding two dollars and change each month because it did not cover the interest. I jumped him about it when he got home from work. When he died, I cashed in one of my insurance policies and paid off all our debt and started fresh. If I have to buy something on credit, like my hearing aids, I always pay at the very least $50 more than the monthly amount but usually more than that. I don't trust any of them to be straight with people and closely watch each statement.

[keithbvadu2]

16. pay off the credit cards every month

My ex-wife did not understand why I insisted that we pay off the credit cards every month when most of our friends had a permanent balance due.

After the divorce, she ran up the cards and realized how much interest she was paying and not running down the balance very quickly.

She took out a bank loan and paid them mostly off.
She still had the same amount of debt to start but the lower interest rate allowed her to pay off the balance much quicker.

When she bought her trailer and land, the bank asked her for her cc balance.
She said it was about 600 or 800 dollars.
Said his jaw just about hit the floor.
He was used to hearing 3000, 5000, 8000 or more.

Now she understands.

[malaise]

15. We have more than a few of these stores on this island

They actually get annoyed when you want to pay the full price. Highway robbery.

[Farmer-Rick]

17. This is a scam I was not aware of

Glad you posted about it.

Now I understand why my AC contractor was so cautious about the Heat Pump finance plan he had available. It was a loan that if you missed a payment they had huge late fees. I avoided that by scheduling payments automatically and paid it off easily.

But I noticed that if I paid what they wanted me to pay every month, I would be paying on it for years instead of the 10 months I had planned. I didn't understand why they were doing that.

[CousinIT]

18. Cautionary tale. Thank you.

And these scumbags love to target older people with this bullshit.

[flying_wahini]

19. Was it at Conn's? Just curious as they are well known to scalp customers on financing.

[True Blue American]

20. This is why I never finance anything.

I am sorry, but your Mother cut them off at the knees . Good for her. smart woman.

The first thing sales people do now. I despise that. They get a cut from financing. I used to be one and made my decision to never lie to the customer to make a sale. Worked for me because my customers trusted me.

[Jacson6]

21. Yeah, The banks are predators.

I have been buying new furniture with Wayfair lately and they have a six months interest free, if you pay it off in whole by the end of six months. If not then you are charged the entire amount of interest even if there is only one cent owed for the furniture. I have saved a lot of money by paying it off before six months and not paying the interest.

[Botany]

22. Macy's had a scam on their credit cards which made me can my card with them.

A 1 dollar per month service charge on my Macy’s card and since I thought I had paid the
account off I didn’t pay any attention to their bills until I noticed that they were adding a $45
per month late fee because of the $1.00 service charge. I cut up the card (I had had it for years)
and put 2 dollars and the cut up card into their return envelope and sent it back to them. They
even called me and told me that they would pay back the late fees and increase my credit line
too.