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During the holidays a lot of high end purchases are made. In fact, according to the National Retail Federation, more money is spent on gifts during November and December than the rest of the year combined. How do we, as American’s, fund these purchases? By credit, layaway, and by simply saving up.
Furniture can be a great gift for your spouse or parent, especially with all the great sales and deals currently being offered. One popular chain-furniture store, Ashley Furniture, offers financing options for your purchases. Financing can be through either GE Capital, Wells Fargo, or Landmark Financial, so this review is specifically related to the terms by GE Capital.
Let’s take a look at these options and see if it’s worth your while.
Ashley Furniture Home Store Card Features:
- 0% intro APR
- Special financing options available
- No annual fee
- 24/7 online account management
- Easy online bill pay
This card was a little trickier to analyze because the company is a franchise, so that leaves room for differences by store. I used the resources I found on the company website and consulted a friend whom is employed with the company in South Carolina.
What we Like
There are a few different financing options available, but how long the term lasts can be determined by the salesman if done in-store. The typical terms are for 6, 12, 18, 24, and 36 months, but they sometimes offer special promotional terms that extend to 48 and even 60 months -five years is a long time to pay off furniture. Discounts can then be applied to an approved financing plan that can range from 5-20%, which directly correlates with their finance terms.
We like that they prominently display the option for new card members to sign up for card security. This is good to have in place in case an “event” comes up. An event is defined by CardSecurity as unemployment, leave of absence, nursing home stay, death, hospitalization, and disability. It costs an additional $1.66 per $100 per month and covers the balance up to $10,000.
What We’re not so Crazy About
The major downside is the deferred interest. If you miss a payment your APR will default to the on-going rate of 29.9% interest on the remainder of the balance. If you fail to pay off your balance before your approved time period, you are charged the 29.9% APR rate from the date the item was purchased.
I’m always very hesitant about any credit card or financial arrangement where the exact terms and conditions are difficult to find. It makes me think they are hiding something, or worse, wanting the freedom to change their terms and conditions at will, with little to no conflict between what’s readily available and the newly drafted terms.
If you’re one of those consumers that never carries a balance, this card is a bad decision because you’re hurting your credit score by opening a new line of credit that you’re going to have paid off in 30 days’ time anyway. If you carry a balance, but set up auto bill pay to ensure you never miss a payment, this wouldn’t be a terrible option for you. Just make sure the monthly payment is enough to cover the charge by the end of your intro period to avoid retroactive interest charges.
If you want to avoid deferred interest, simply apply for a rewards credit card so you get cash back, or points, for all purchases and not have to worry about the sky-high penalty APR. Take a look at these offers and see how it adds up!