Re: Options for using credit/financing to buy a la... - myFICO® Forums

Anonymous · ‎07-07-2019

Hi all,

(I hope this is in the right forum. Otherwise please direct me to the appropriate place!)

So I really need a new laptop for school, and I'm wondering what the best way to go about doing this would be. I'm 23 and have just opened my two credit accounts within the last year.

My current credit cards are:

Discover it - $1800 CL, opened September 2018

Citi Rewards+ Student Card - $3000 CL, opened June 2019 with 0% APR until January 2020

So as you can see I have a limited history with credit, but have maintained 1-2% utilization with this amount of credit and pay in full and on time every month. I am probably going to go with a Dell laptop, and they have their own Preferred Financing system. I've heard the interest rates are pretty bad though, and I'm not sure if I would be approved since I have a limited history. With Citi, I have the 0% introductory APR until January. The laptop I am considering would come out to be about $950 with all the student/other discounts. So if I were to charge the computer to my credit card, would this mean I would not pay interest on it if I pay it off in full by January? It would come out to ~19% utilization if I keep the whole amount on there (which I probably wouldn't do, I'd pay off as much as I can afford at a time).

I currently have an income from a part-time job and allowance of $260 a week. I could probably dedicate $110-150 and maybe a little more of this to the computer each week. So I could definitely pay it off, potentially by September or October. I'm just not really sure what the best way to go about it would be. If I do use my credit card, I was thinking of saving up about $300 or so and immediately pay off that much of the laptop in order to keep my utilization lower. I know it's best to not go above 6% (I believe) but my scores are pretty good right now (EX: 753, TU: 738, EQ: not sure) and I don't have anything else coming up that I would need very good scores for.

Can you guys advise me on what might be the best option here? Or if I have not mentioned another possible option, please tell me!

DaveInAZ · ‎07-07-2019

Well, first off congratulations on being so aware and careful with your personal finances at age 23.

0% interest is the way to go, and that 0% on Citi card until January would work, and 19% usage isn't bad, and that balance & payments on the card would strengthen your profile with Citi that you are responsible with credit card use. Under 9% utilization is considered Excellent, but under 29% usage is still considered Good.

But only 6 months to pay it off is kind of short, good to be prudent but you don't want to have to live off ramen noodles & crackers to pay the card off in time. A quick search for "dell financing options" finds they have financing options with 12 months 0% for purchases of $899 or more. https://www.dell.com/en-us/learn/finance-and-rewards/financing-details?&~ck=mn#Special-Offers

Also Newegg also sells Dell and has similar financing. Just be aware of those "12 months 0%" deals are almost always deferred interest, meaning if you don't pay it off by the end of the 0% they charge interest from the purchase date, which you want to avoid at all costs. But I've used deferred financing for many years and never had a problem - just divide the purchase amount by the # of months with 0% and make that as your minimum monthly payment so you don't get got short.

SouthJamaica · ‎07-07-2019

@Anonymous wrote:
Hi all,
(I hope this is in the right forum. Otherwise please direct me to the appropriate place!)

So I really need a new laptop for school, and I'm wondering what the best way to go about doing this would be. I'm 23 and have just opened my two credit accounts within the last year.

My current credit cards are:
Discover it - $1800 CL, opened September 2018
Citi Rewards+ Student Card - $3000 CL, opened June 2019 with 0% APR until January 2020

So as you can see I have a limited history with credit, but have maintained 1-2% utilization with this amount of credit and pay in full and on time every month. I am probably going to go with a Dell laptop, and they have their own Preferred Financing system. I've heard the interest rates are pretty bad though, and I'm not sure if I would be approved since I have a limited history. With Citi, I have the 0% introductory APR until January. The laptop I am considering would come out to be about $950 with all the student/other discounts. So if I were to charge the computer to my credit card, would this mean I would not pay interest on it if I pay it off in full by January? It would come out to ~19% utilization if I keep the whole amount on there (which I probably wouldn't do, I'd pay off as much as I can afford at a time).

I currently have an income from a part-time job and allowance of $260 a week. I could probably dedicate $110-150 and maybe a little more of this to the computer each week. So I could definitely pay it off, potentially by September or October. I'm just not really sure what the best way to go about it would be. If I do use my credit card, I was thinking of saving up about $300 or so and immediately pay off that much of the laptop in order to keep my utilization lower. I know it's best to not go above 6% (I believe) but my scores are pretty good right now (EX: 753, TU: 738, EQ: not sure) and I don't have anything else coming up that I would need very good scores for.

Can you guys advise me on what might be the best option here? Or if I have not mentioned another possible option, please tell me!

1. Forget the Dell financing.

2. Use your Citi card but make the purchase the day after your statement cuts, so the 32% utilization won't be reported.

3. Then start paying it down, making sure that the next statement balance is below $840.

4. Yes you won't be paying any interest if you pay it off during the promo period.

Unify FCU Platinum Visa Variable Rate 35k

TD Bank Business Solutions Visa (Bus) 25k

FNBO Evergreen Business Edition Visa (Bus) 20k

Liberty (formerly Evansville Teachers) FCU Platinum Prime Plus MC 15k

US Bank Triple Cash Rewards Visa (Bus) 12k

SEG-fenced credit union Platinum Visa 10500

Comenity AAA Travel Advantage Visa $6200

Members 1st FCU Low Rate Platinum Visa 5k

PLOC: Langley FCU 40k; Penfed CU 15k; NFCU 15k; Teachers FCU 15k; Affinity FCU 10k. BLOC: NFCU 5k

Total revolving limits 741200 (620700 reporting) FICO 8: EQ 703 TU 704 EX 687

Shooting-For-800 · ‎07-07-2019

I would put it on citi and pay $200 per month plus your other monthly charges each month.

You will be paid off by Jan and have paid no interest.

Your Fico score may drop but it will rise as you make payments.

GL!

Rebuild started in 2014 - $100k unsecured credit in 2017 - $500k unsecured credit in 2024.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!

Anonymous · ‎07-08-2019

Congrats on your focus of your personal credit and your achievement so far!

I agree with the others, use your citi card and pay it off.

But DO NOT use that citi card for ANY OTHER purchases until it is paid off.

There may be some hidden future needs for using a credit card, but until it is paid off

do not use that citi card for anything else. enough said, im am sure you understand.

That is what they want to happen, but keep your focus on your goal to have it paid off,

perferably before december.

Shooting-For-800 · ‎07-08-2019

@Anonymous wrote:
Congrats on your focus of your personal credit and your achievement so far!

I agree with the others, use your citi card and pay it off.

But DO NOT use that citi card for ANY OTHER purchases until it is paid off.

There may be some hidden future needs for using a credit card, but until it is paid off
do not use that citi card for anything else. enough said, im am sure you understand.
That is what they want to happen, but keep your focus on your goal to have it paid off,
perferably before december.

YES! THIS IS TRUE. Do not use your Citi card for ANYTHING else if you buy the laptop. Use your Discover for everything else and pay it off each month.

I use Cap One 0% all the time and you can still use it while having a 0% balance without penalty unlike almost every other credit card so I was not considering that with Citi.

Rebuild started in 2014 - $100k unsecured credit in 2017 - $500k unsecured credit in 2024.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!

Brian_Earl_Spilner · ‎07-08-2019

Personally, I would put it on the Citi card and maximize the 0% by making sure it's paid off the month before the promo ends. Throw the extra money you were gonna pay into a savings. Sounds to me like you wouldn't touch it. As for utilization, unless there's a chance you may need to apply for credit in the next 2 or 3 months, it doesn't matter. That's the thing with credit, it's always good to keep it in top shape in case you need it, but none of it matters if you're not applying for credit or a job.

Anonymous · ‎07-08-2019

Any reason why $950? I ask because there are plenty of laptops out there for half that, especially considering the abuse a Laptop can receive while in College. Depending upon the owner of course, but unexpected things can and do happen.

Granted various software programs needed for School will increase the costs, so I was curious. I bought an HP fairly recently for under $600 on sale at Staples.

joltdude · ‎07-14-2019

Just going to me too... But id also poke Discover and see if your eligible for a CLI....... (give you a little more breathing room for purchases and if its large enough, might be an option.. if your discover has a 0% period which is possible if you got it late last year)...

Like the other folks suggestion to put it on Citi..... and waiting untill after your statement generates to purchase it... Also a good idea.

And to the forum member who was like. you can get something cheaper.. You know what you need, and your going to have to use this for hopefully awhile.. so if it makes it easier and more enjoyable to use. it can be money well spent... Do consider some sort of service policy on it esp if your going to be trudging it around for college. ... keyboards and displays break, fans fail, etc...

-J