Thoughts on Financing...

[ANDS!]

If I end up still getting turned down for cards, im gonna bite the bullet and finance an inexpensive bike next season...getting a parent to co-sign if I have to.

Good idea, especially if you have disposable income, and even better if you're tossing down quite a bit in cash to ease your payments. Even owing a thousand dollars and paying it off over a year will be enough to establish credit on your part, and you'll more than likely start seeing people send YOU offers for cards and promotions.

As someone said, recognize that risks are involved (as they are in anything), and that most of the warning come from the vantage point of assuming you ARENT going to be responsible with the money you owe, and that you're going to screw up at some point. If you remove that barrier, theres nothing that stops you from having a great experience here.

[Ian522]

On a side note....Apparently, there are millions of people in this country that have a poor credit history, which, contrary to what some here may think, is much worse and detrimental than no credit history.
I'm willing to bet that a majority of those people thought the same thing I'm reading here...."I'll just finance this (because they'll let me), pay off the low monthly payments in two years and everything will be great".
All I'm saying is that things don't always go as planned and the consequences can be severe. (Spare me the "I'm too smart for that" or the "it can't happen to me" reply) I'm just saying be careful.

I see what you are saying. But thats why I would plan on picking an inexpensive bike, put a very large down payment, and plan to have it payed off within 2 years. Relatively safe in my opinion. If anything crappy ever happened like if I lost my job or something, I could still manage to come up with a measly $50 a month.

A much more dangerous plan would heavily financing a $18k Harley over 5 years or something like that. Thats where I think most people get into trouble, gambling that they will be able to handle a large payment over a long period of time.

[shalihe74]

Wow did this thread snowball.

I might try to get a credit card again, maybe one of those store based cards like from best buy, home depot, etc. From what I hear they are very easy to get approved for since the interest is pretty awful...like 20% or more. But if I keep a small balance and then pay it off in full each month, I wouldnt have to really worry about interest anyway.

If I end up still getting turned down for cards, im gonna bite the bullet and finance an inexpensive bike next season...getting a parent to co-sign if I have to. I need to put myself on the map. As nice and worry free as it is to live without credit, I think in the long run it makes things more difficult. Credit is really a necessary evil for all the reasons everyone has stated. Just learn to manage it smartly and you'll be fine.

Diemonkeys I respect how strongly you believe in your opinion, but I think your hatred/fear of credit is blinding you to the benefits of having it. But to each his own I guess.

On Clarkhoward.com (a consumer advice website with huge forums on smart money moves and debt elimination) one of the most-recommended cards to get for credit-building purposes is one from a gas station.

The problem with a Home Depot or Best Buy card is that there are opportunities there for impulse purchasing. You may think you won't do it, but the first time you see something you 'just have to have'....

With a gas card, however, you are not spending money on anything you don't already spend it on - you're just switching your method of payment. (That was a cumbersome sentence.) And there is a fairly finite amount of money a person can spend on gas in a given month...

Just my 2 dihram.

[MrShake]

One thing you may want to check with the bank or dealership on is the minimum amount they will loan.

Lets say you buy a 4000 bike, put down 3000 and try to finance only 1000. The bank may be unwilling to do that, or raise the interest dramatically on it. I sold cars for a while and ran across many folks who would try to put down to big a payment (especially on used cars) and then the bank wouldn't finance it.

Just something to be aware of

[BMK]

On a side note....Apparently, there are millions of people in this country that have a poor credit history, which, contrary to what some here may think, is much worse and detrimental than no credit history.
I'm willing to bet that a majority of those people thought the same thing I'm reading here...."I'll just finance this (because they'll let me), pay off the low monthly payments in two years and everything will be great".
All I'm saying is that things don't always go as planned and the consequences can be severe. (Spare me the "I'm too smart for that" or the "it can't happen to me" reply) I'm just saying be careful.

I see what you are saying. But thats why I would plan on picking an inexpensive bike, put a very large down payment, and plan to have it payed off within 2 years. Relatively safe in my opinion. If anything crappy ever happened like if I lost my job or something, I could still manage to come up with a measly $50 a month.

A much more dangerous plan would heavily financing a $18k Harley over 5 years or something like that. Thats where I think most people get into trouble, gambling that they will be able to handle a large payment over a long period of time.

Sounds like you have a good handle on the situation. As long you you follow your own advice, I'd say go for it.

[Erg0n]

I agree with everyone here. If you can wait a bit and buy the bike straight up then you should do so. As for your lack of credit, you should apply for one and build it slowly. I wouldn't by a bike on a credit card, but little things, say, less than 200$ or even less than that would be sufficient. It sucks but you really need good credit just in case you need to buy something big, like a house or car

I saved for 1.5 years before I could buy the bike I wanted with cash, the dealer even shaved off quite a bit of dollars because I was ready to bring it out of the lot the same day.

[tropicalhotdog]

I'm not saying anything more until MrShake puts his old avatar back.

[MrShake]

HAHAHAHAHAHAHAHA




I only changed it because I've started reading this forum at work.

[Nalian]

I agree with everyone here. If you can wait a bit and buy the bike straight up then you should do so. As for your lack of credit, you should apply for one and build it slowly. I wouldn't by a bike on a credit card, but little things, say, less than 200$ or even less than that would be sufficient. It sucks but you really need good credit just in case you need to buy something big, like a house or car

I saved for 1.5 years before I could buy the bike I wanted with cash, the dealer even shaved off quite a bit of dollars because I was ready to bring it out of the lot the same day.

If you think that statement agrees with everyone on here you didn't read the thread too well. There has been a lot of dissenting opinion.

I'm glad MrShake changed his icon.

[flynrider]

I see what you are saying. But thats why I would plan on picking an inexpensive bike, put a very large down payment, and plan to have it payed off within 2 years. Relatively safe in my opinion. If anything crappy ever happened like if I lost my job or something, I could still manage to come up with a measly $50 a month.

A much more dangerous plan would heavily financing a $18k Harley over 5 years or something like that. Thats where I think most people get into trouble, gambling that they will be able to handle a large payment over a long period of time.

Not a bad plan, if you're going to finance something. One thing I would add : The reason that the bike shops finance via a credit card is that U.S. banking rules are quite different for credit cards (i.e. revolving credit lines) than they are for common consumer loans. Many of the protections that you have on a fixed rate consumer loan do not exist when financing via a credit card. Namely, a credit card's interest rate can change at any time, for any reason, if the the controlling bank feels like it. You will only find this in the very tiny print in the contract. Read it very, very carefully. The terms of CC financing are nothing like a consumer loan.

That said, it would also be a good idea to start establishing credit with a low limit credit card from the bank where you do business. Unlike the offers that come in the mail, a bank that knows you will probably authorize a low limit card that you can use to establish a credit record. I did that many years ago, when I discovered (in my late 20s) that I hadn't ever established a credit record, and it was making the purchase of big ticket items (like a house) very difficult.

I started with a Visa card from my local bank that had a $300 limit. I used the card every month and paid the balance in full. To establish a credit record, you don't have to borrow money, just show a record of regular, on time payments. Over the years, they upped the limit periodically as my credit rating looked better. I still have that card and I think the limit is close to $30K. To this day, I haven't paid a penny of interest on that card (over 18 yrs.). If you're responsible, it's a no-brainer.