Financing shady practices

[Gilligan]

Had a new HVAC system installed for 20K$ recently. Jumped on the zero-percent financing option, of course we did.

Get a call from someone at the financing company a couple weeks after the installation was completed, reviewing the details of the agreement, making sure I understand that one late payment and the interest goes up to 24%. Duly noted! They said we should receive the financing package and first invoice in a couple weeks.

A couple weeks later, I call them to see where the package is; am assured its going to arrive any day now.

Package and invoice finally arrives in the mail. Payment is due the next day. My resourceful wife manages to find a way to pay the invoice on line that same day.

What common bastards they are. What if we'd been out of town for any reason and didn't pickup up our mail for a few days?. Clearly this was very purposely done in order to "trip out" as many people as possible from the 0% funding.

Will be calling to express my "concerns" and determine if future invoices are also going to arrive with payment due the next day..

 

[OccamsRazor]

Have had this happen to me on 2 occasions. Seems to be a common tactic.

 

[Kyle]

And who was the Fine Upstanding Company that organized this?

 

[Gilligan]

And who was the Fine Upstanding Company that organized this?

I'd rather not say at this juncture; the owner is a friend of mine and his son and mine are best friends. I'll be having a word with him about it though...

 

[Gilligan]

Have had this happen to me on 2 occasions. Seems to be a common tactic.

It should be illegal.

 

[OccamsRazor]

It should be illegal.

Definitely! One of mine was a finance of some furniture that was purchased. Took advantage of the 0% for 12 months. Called the financing company 3 times about the first bill. Was told "Its on the way!" Didn't get it in the mail until the day it was due. Paid it off in full that day and have not bought furniture from that company since.

 

[Gilligan]

Definitely! One of mine was a finance of some furniture that was purchased. Took advantage of the 0% for 12 months. Called the financing company 3 times about the first bill. Was told "Its on the way!" Didn't get it in the mail until the day it was due. Paid it off in full that day and have not bought furniture from that company since.

If they insist on continuing with the shady gotcha game, I'll pay it off in full. But I'm sure that's not an option for a lot of people that fall in to that trap. We didn't "plan" on replacing the entire HVAC system, nor set aside any money just for that; the old one failed and the replacement had to be done immediately. I'm sure that's almost always the case.

 

[RoseRed]

I used Synchrony to get my chimney fixed to use the 0% financing. Package came early and I receive an email each month ahead of payment time to remind me. I pay extra and am ahead on payments, so I make sure it's paid off early or at least on time.

 

[Kyle]

Only thing I took adavantage of like that was on a new computer I bought in March. 0% for 12 months as long as its paid off before the final due date. ( Of course it will be. ) And I get to leave that 4k earning 4.6% instead.

 

[Sneakers]

I know it's just not possible for many, but if I can't pay for it up-front, I don't buy it. I very much dislike paying interest and finance fees over and above the item cost. The only finance plan I've ever used was for car loans, and even then I took out secured loans (loan against my own money).

 

[Clem72]

It should be illegal.

It should be illegal to change the interest rate based on a missed payment. Add a late fee if you're worried about late payments.

 

[stgislander]

If they insist on continuing with the shady gotcha game, I'll pay it off in full. But I'm sure that's not an option for a lot of people that fall in to that trap. We didn't "plan" on replacing the entire HVAC system, nor set aside any money just for that; the old one failed and the replacement had to be done immediately. I'm sure that's almost always the case.

Phew. It sounds like we dodged a bullet scraping enough together to pay 100%.

 

[Gilligan]

It should be illegal to change the interest rate based on a missed payment. Add a late fee if you're worried about late payments.

and yet credit card companies have been doing that as long as I can remember.

 

[OccamsRazor]

I know it's just not possible for many, but if I can't pay for it up-front, I don't buy it. I very much dislike paying interest and finance fees over and above the item cost. The only finance plan I've ever used was for car loans, and even then I took out secured loans (loan against my own money).

I can understand if there are multiple payments missed and/or warnings given but, if 1 payment is missed and it is explainable, then I believe it should be worked out or a small fee added. They do disclose the "slightest error and you get maxed out" system in the T&C but, they ALL do this.

 

[Gilligan]

I know it's just not possible for many, but if I can't pay for it up-front, I don't buy it. I very much dislike paying interest and finance fees over and above the item cost. The only finance plan I've ever used was for car loans, and even then I took out secured loans (loan against my own money).

"not buying it" isn't an option for a critical system like the HVAC. Or replacing a failed well....or replacing a failed roof...some things just have to be done right away.
That aside, not taking advantage of zero-percent financing is generally considered foolish; your money kept for better uses that have a rate of return. I'm not surprised that the financing entities offering such great terms have trip wires everywhere.

 

[Gilligan]

ah ha! Digging wayyy down in to the fine print, I discover that there is a grace period of 30 days after payment due date before a payment is considered late. My bad...its not as bad as first appeared (nor is that as explained to me when they called). It's still a "miss just one" situation though.

 

[Sneakers]

"not buying it" isn't an option for a critical system like the HVAC. Or replacing a failed well....or replacing a failed roof...some things just have to be done right away.

Like I said, very few can, but I paid in full for a roof, HVAC, drain field, and all the renovations in the house. Some may say that's stupid, I should take a loan and let my money work for me, but the amount of gain for that relatively small amount of money doesn't come close to knowing I'm free and clear of all responsibilities.

 

[Clem72]

and yet credit card companies have been doing that as long as I can remember.

Do they? Never happened to me but I don't carry a balance. Credit cards aren't really loans though so it makes sense they would work differently.

I looked it up and the internet (which we know is never wrong) says they can't change it unless you are more than 60 days delinquent or there has been a large increase in the prime rate. OR if you have had the card longer than 1yr/whatever the original contract period is. And when they do change the rate, the new rate only applies to new purchases and the old balance will have the old rate until paid off (and under credit card laws older balances are paid first). This doesn't sound as bad, it would be perfectly fair if the bank that gave you a loan says "you paid late, if we ever give you another loan it will be at a higher rate" which is what the credit card is doing by applying that rate to new purchases.

 

[OccamsRazor]

Do they? Never happened to me but I don't carry a balance. Credit cards aren't really loans though so it makes sense they would work differently.

I looked it up and the internet (which we know is never wrong) says they can't change it unless you are more than 60 days delinquent or there has been a large increase in the prime rate. OR if you have had the card longer than 1yr/whatever the original contract period is. And when they do change the rate, the new rate only applies to new purchases and the old balance will have the old rate until paid off (and under credit card laws older balances are paid first). This doesn't sound as bad, it would be perfectly fair if the bank that gave you a loan says "you paid late, if we ever give you another loan it will be at a higher rate" which is what the credit card is doing by applying that rate to new purchases.

This is interesting. Many moons ago, my friend had a USAA credit card. Long story short, it was going to be a tight month coming up and he called the company and let them know in advance and all seemed to be ok. Next month, interest rate went to max (19% if I remember correctly) and that was the rate going forward. No 30 day grace period. He ended up paying it off as fast as he could and has never done business with them since. He was a service member at the time too! To this day, when I mention USAA, his response is "OH YEAH... They support the troops alright!"

 

[Kyle]

This is interesting. Many moons ago, my friend had a USAA credit card. Long story short, it was going to be a tight month coming up and he called the company and let them know in advance and all seemed to be ok. Next month, interest rate went to max (19% if I remember correctly) and that was the rate going forward. No 30 day grace period. He ended up paying it off as fast as he could and has never done business with them since. He was a service member at the time too! To this day, when I mention USAA, his response is "OH YEAH... They support the troops alright!"

They're performing like every other financial institution out there now.

Their Auto Insurance Rates aren't so great lately either.