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Topic # 151734 3-Sep-2014 16:04
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It seems that the big retailers are all moving to interest-free finance - it would be naive to think that the finance portion isn't being built into the purchase price.

I like to pay cash for things, but a lot of the time the retailers are removing the incentive to do so.  What do you lot do to get a better deal when opting not to do it on Q Card/GEM Visa?

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  Reply # 1121224 3-Sep-2014 16:09
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From what I understood, the interest free deals work because most people dont pay the entire amount in the interest free period?  And the retail stores get paid by GE Money etc...
So "cash" doesnt mean much to them - the best you can do is get them to undercut the competition...

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  Reply # 1121241 3-Sep-2014 16:19
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I ask - I always seem to get better than their "interest free" deal.

 
 
 
 


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  Reply # 1121243 3-Sep-2014 16:23
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nate: It seems that the big retailers are all moving to interest-free finance - it would be naive to think that the finance portion isn't being built into the purchase price.

I like to pay cash for things, but a lot of the time the retailers are removing the incentive to do so.  What do you lot do to get a better deal when opting not to do it on Q Card/GEM Visa?


I ask for their best cash price. But the problem with this is that after people do that, they may then pay be credit card, so the quoted price may not be the lowest possible. If some retailers are building it into their pricing, then some other won't be, so those others may be able to offer better pricing for cash. Otherwise the way to do it is buy things when they are on sale, as often the sale price is lower margin so they can sell a big quantity of them,  or loss leader to get people in the store.

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  Reply # 1121251 3-Sep-2014 16:25
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It's actually illegal for retailers to offer discounts for people who do not take the 'interest free' offer. Reason for that is that if you give a cheaper price, then the other price isn't really interest free.
That's not to say some retailers don't do it, but they aren't supposed to.

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  Reply # 1121274 3-Sep-2014 16:35
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From talking to staff, organisations like Q card and Gem exist because of the proportion of customers default on payments or become delinquent. The retailers love these customers and provide the 0% interest free to entice such people to spend more than what they can afford.

Probably does not ring true for people in this forum

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  Reply # 1121278 3-Sep-2014 16:38
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khull: The retailers love these customers and provide the 0% interest free to entice such people to spend more than what they can afford. 

Probably does not ring true for people in this forum


You have to question whether this is very moral. 

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  Reply # 1121283 3-Sep-2014 16:42
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When do morals come into money making......






XPD / Gavin / DemiseNZ

 

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  Reply # 1121326 3-Sep-2014 17:32
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xpd: When do morals come into money making......




Depends if people can sleep at night, knowing what they may be doing may not be in other peoples best interests.

Credit is cheap at the moment, but these things go in cycles, and at some stage people are going to be caught out, especially with the borrowings many people have taken out on houses. Although buying a house at a realistic price is considered smart debt due to it being an asset. Consumer debt is usually considered as dumb debt, as it is buying a consumable, which over time will have no value.

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  Reply # 1121352 3-Sep-2014 18:32
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If they had morals they wouldn't sell extended warranties

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  Reply # 1121355 3-Sep-2014 18:42
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nathan: If they had morals they wouldn't sell extended warranties


I disagree, I've purchased Extended Warranties which offer me more than CGA, with guaranteed less effort, and sometimes for very little. Yes many EWs are oversold however in my opinion, your statement above is rubbish.

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  Reply # 1121356 3-Sep-2014 18:43
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mattwnz:
khull: The retailers love these customers and provide the 0% interest free to entice such people to spend more than what they can afford. 

Probably does not ring true for people in this forum


You have to question whether this is very moral. 


It's legal. Same as to selling a car to someone that will default who will then have it repoed at scrap value washed and put back on the yard for the next customer




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  Reply # 1121361 3-Sep-2014 18:53
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Bee: From what I understood, the interest free deals work because most people dont pay the entire amount in the interest free period?  And the retail stores get paid by GE Money etc... So "cash" doesnt mean much to them - the best you can do is get them to undercut the competition...

I'm assuming the card company still charges a commission to the retailer. So there is that. With credit cards there is still risk of chargeback for the retailer, and I'd guess some delay in availability of the full balance. So there are still good reasons to prefer instant payment without conditions.

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  Reply # 1121362 3-Sep-2014 18:55
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richms:
mattwnz:
khull: The retailers love these customers and provide the 0% interest free to entice such people to spend more than what they can afford. 

Probably does not ring true for people in this forum


You have to question whether this is very moral. 


It's legal. Same as to selling a car to someone that will default who will then have it repoed at scrap value washed and put back on the yard for the next customer


Legal though doesn't mean it is morally right. But I believe in karma. 

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  Reply # 1121363 3-Sep-2014 18:58
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gzt:
Bee: From what I understood, the interest free deals work because most people dont pay the entire amount in the interest free period?  And the retail stores get paid by GE Money etc... So "cash" doesnt mean much to them - the best you can do is get them to undercut the competition...

I'm assuming the card company still charges a commission to the retailer. So there is that. With credit cards there is still risk of chargeback for the retailer, and I'd guess some delay in availability of the full balance. So there are still good reasons to prefer instant payment without conditions.

 

Isn't there only the risk of a chargeback if it is a valid reason. The credit card companies won't automatically grant it without contacting the retailer first to find out their side of the story surely?. I would be interested to know how many retailers are affected by problem chargebacks though no fault of their own. I think in our current society with cheap credit, cash is being undervalued. IMO cash should be king.

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  Reply # 1121368 3-Sep-2014 19:14
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No one has mentioned the various fees that the finance company lumps on to your total sum.

Eg:
$5 card issue fee
$40-50 booking fee
$3 per month administration fee etc.
Plus anything else that might be applicable to your contract. Theres fees for all sorts.

All up from checking a few finance companies (qcard, finance now etc) it works out at around $80 per year.

Retailers like interest free deals because some customers are willing to spend all the way up to their approved limit. Whether or not they can manage to pay this back is up to the person and the finance company - the retailer doesn't have to deal with the aftermath.

Furthermore, the finance companies (or the tool the retailer is using) will often quote your monthly repayments at whatever the minimum spend is per month - eg 3%. This will almost always mean that your payments will go beyond your interest free period.

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