DO YOU REALLY NEED IT STRAIGHTAWAY? Buying on HP means you usually end up paying two to three times higher than the amount you would have if you had paid cash

MOST people hit a point in time when they truly need new furniture or appliances, but do not have the money to pay for them.

This is usually when they rush to the nearest store to buy the item on credit or hire purchase.

They know that they can get whatever they need by paying a deposit and signing a contract to pay monthly for a certain length of time.

They can either leave the store with the item or have it delivered.

It all sounds so very simple, doesn't it?

But in other ways, credit can be a huge trap.

When you enter a store to buy something on hire purchase, you may be in such a desperate situation that you do not even bother to read the fine print on your contract.

You are probably also not looking at the highly inflated interest rate you are paying for your new refrigerator or lounge suite.

All you see is that you can pay an affordable amount of money, forgetting that the interest rate is very high.

You usually end up paying two to three times higher than the amount you would have if you had paid cash.

And if you miss a payment, you can expect a phone call to remind you that you are in arrears.

You will also have additional interest added to your account.

If you default on your payment too many times in a row, the accounts manager will even show up at your door with the store truck to take back the merchandise.

This means that you will lose all the money you have paid so far.

Buying any item on hire purchase is only advisable if you do not have any other choice.

So, if you are truly in a situation where this is your only answer, make it work for you.

You can budget your payment and even double up on them when possible.

Once you have completed the contract, the item will become yours.

It is very important, however, to weigh up whether you really need the item or if it is a luxury. - money savings tips.com