ROOMS TO GO BEWARE!!!

[cocomadd]

Hi

I thought I let you guys know.  If you seek a credit line with R2G for furniture, it is treated like a revolving credit card!  So, this is my story.  My scores are 735, 729, and 680, I went to Rooms to go to buy a coach for my loft.  They gave me a 1,000 credit line.  I said, sure why not and purchased the coach for $894.  Now I was under the impression that the credit was like that of a car you borrow and make payments and payments report. NO!!  You buy and it reports that your credit line is 1,000 and you have maexed to $894 so my utilization is 85%!!!!!!, whic dropped my 680 score to 649!!!!!!!!!!!!!!!!!!!!  I dont know about the others!  But if you are trying to rebuild DO NOT USE ROOMS TO GO FOR CREDIT!!!  NOW AFTER I THOUGHT MY PAYMENTS WOULD BE 26 BUCKS INTEREST FREE (SOUNDS GOOD) NOW I HAVE TO PULL MONEY OUT OF SAVINGS TO PAY IT OFF RIGHT AWAY!!!!

[Jasir]

Take a breath, don't stress. First, are you planning to app for anything within the next 6 to 12 months? (Or however long your 0% APR deal is?) If not, don't worry about the FICO score drop. It will climb up with each month of timely payment.

Suggestions welcome? (I hope so becasue here they come). To avoid dipping too deep into your savings you can:

1. Just stick to your minimum monthly payment and not worry about FICO scoring; it'll recover.

2. Double or triple your minimum monthly payment. Your FICO will recover sooner.

3. Just dip into your savings to pay 1/2 off and them minimum payment for the duration of 0% APR. Your FICO will recover quicker.

Just remember: many furniture/applicance finance options will report as revolving rather than installment, so you have to "ask ask ask" and read the fine print before you say "yes." But breathe for now. Your FICO will recover.

[StartingOver10]

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@cocomadd wrote:

Hi

I thought I let you guys know.  If you seek a credit line with R2G for furniture, it is treated like a revolving credit card!  So, this is my story.  My scores are 735, 729, and 680, I went to Rooms to go to buy a coach for my loft.  They gave me a 1,000 credit line.  I said, sure why not and purchased the coach for $894.  Now I was under the impression that the credit was like that of a car you borrow and make payments and payments report. NO!!  You buy and it reports that your credit line is 1,000 and you have maexed to $894 so my utilization is 85%!!!!!!, whic dropped my 680 score to 649!!!!!!!!!!!!!!!!!!!!  I dont know about the others!  But if you are trying to rebuild DO NOT USE ROOMS TO GO FOR CREDIT!!!  NOW AFTER I THOUGHT MY PAYMENTS WOULD BE 26 BUCKS INTEREST FREE (SOUNDS GOOD) NOW I HAVE TO PULL MONEY OUT OF SAVINGS TO PAY IT OFF RIGHT AWAY!!!!

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Be careful with this "interest free" type payment. It usually means that there is a deferred interest component that kicks in after the interest free period and the ENTIRE deferred interest is added to the balance.  The minimum payment is not designed to pay off the line within the interest free period so if you don't have it paid off in its entirety by the time the interest free period is up - then you get a sudden increase in your balance. You can read all about it in the contract terms and conditions section of your new credit line or the sofa purchase contract. R2G is notorious for this type of financing. It is fine if you pay it off prior to the end of the interest free period.

Frankly it is best if you calculate what you need to pay to have it paid off one month prior to the end of the interest free period so you don't accidentally incur the added expense of the deferred interest. JMO.

[physicist82]

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@StartingOver10 wrote:

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@cocomadd wrote:

Hi

I thought I let you guys know.  If you seek a credit line with R2G for furniture, it is treated like a revolving credit card!  So, this is my story.  My scores are 735, 729, and 680, I went to Rooms to go to buy a coach for my loft.  They gave me a 1,000 credit line.  I said, sure why not and purchased the coach for $894.  Now I was under the impression that the credit was like that of a car you borrow and make payments and payments report. NO!!  You buy and it reports that your credit line is 1,000 and you have maexed to $894 so my utilization is 85%!!!!!!, whic dropped my 680 score to 649!!!!!!!!!!!!!!!!!!!!  I dont know about the others!  But if you are trying to rebuild DO NOT USE ROOMS TO GO FOR CREDIT!!!  NOW AFTER I THOUGHT MY PAYMENTS WOULD BE 26 BUCKS INTEREST FREE (SOUNDS GOOD) NOW I HAVE TO PULL MONEY OUT OF SAVINGS TO PAY IT OFF RIGHT AWAY!!!!

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Be careful with this "interest free" type payment. It usually means that there is a deferred interest component that kicks in after the interest free period and the ENTIRE deferred interest is added to the balance.  The minimum payment is not designed to pay off the line within the interest free period so if you don't have it paid off in its entirety by the time the interest free period is up - then you get a sudden increase in your balance. You can read all about it in the contract terms and conditions section of your new credit line or the sofa purchase contract. R2G is notorious for this type of financing. It is fine if you pay it off prior to the end of the interest free period.

Frankly it is best if you calculate what you need to pay to have it paid off one month prior to the end of the interest free period so you don't accidentally incur the added expense of the deferred interest. JMO.

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Carecredit is the same way. We got a CareCredit card when I had an emergency root canal. The dentist office actually requested more then the cost of the procedure (they wanted me to get other stuff done too.) She said if you charged at least 2000 then it was interest free for 18 mon or 2 years I don't remember. So she requested that amt and charged the new card the whole 2200. This gave us a credit on the account at the dentist office for about $700. We noticed on the first months bill that paying the min monthly payment wouldn't pay it off before the no interest period was up. On top of that each mon we paid as the balance got lower our min monthly payment got smaller so there was no way the min would pay it off. I hated my experience at that dentist during my root canal so a couple months later I had them refund the $700 credit back to the CareCredit card and then when we got our taxes we paid the remaining amount off a couple of months before the interest was due. I think the deferred interest if we hadn't paid it off by the end of the period would have been like $300. 

[ezdriver]

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@StartingOver10 wrote:

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@cocomadd wrote:

Hi

I thought I let you guys know.  If you seek a credit line with R2G for furniture, it is treated like a revolving credit card!  So, this is my story.  My scores are 735, 729, and 680, I went to Rooms to go to buy a coach for my loft.  They gave me a 1,000 credit line.  I said, sure why not and purchased the coach for $894.  Now I was under the impression that the credit was like that of a car you borrow and make payments and payments report. NO!!  You buy and it reports that your credit line is 1,000 and you have maexed to $894 so my utilization is 85%!!!!!!, whic dropped my 680 score to 649!!!!!!!!!!!!!!!!!!!!  I dont know about the others!  But if you are trying to rebuild DO NOT USE ROOMS TO GO FOR CREDIT!!!  NOW AFTER I THOUGHT MY PAYMENTS WOULD BE 26 BUCKS INTEREST FREE (SOUNDS GOOD) NOW I HAVE TO PULL MONEY OUT OF SAVINGS TO PAY IT OFF RIGHT AWAY!!!!

---

Be careful with this "interest free" type payment. It usually means that there is a deferred interest component that kicks in after the interest free period and the ENTIRE deferred interest is added to the balance.  The minimum payment is not designed to pay off the line within the interest free period so if you don't have it paid off in its entirety by the time the interest free period is up - then you get a sudden increase in your balance. You can read all about it in the contract terms and conditions section of your new credit line or the sofa purchase contract. R2G is notorious for this type of financing. It is fine if you pay it off prior to the end of the interest free period.

Frankly it is best if you calculate what you need to pay to have it paid off one month prior to the end of the interest free period so you don't accidentally incur the added expense of the deferred interest. JMO.

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This is great advice. I agree 100%. Most people do not know that ALL the accrued interest is tacked on if the balance is not paid by the end of the "interest-free" period. That is one cool deal for creditors ... like snake that patiently waits until the time is right and then strike!

[fishbjc]

Well, the 0% is worth it.  If I can save $$$, then it's all good.  I charged $5k for my eye surgery for 12 months.  I didn't have the cash, up front, nor did I want to pay 18% on my regular cc.  Scores are coming back up and I'm paying it off monthly....almost there!

[pisspoorcredit]

Good info! My husband opened a Conn's account for furniture and his score dropped about 40 points as well. I knew that would probably happen.

[Ragelog]

This seems like it should be common sense most credit is extended the form of a revolving credit line with exception of Home, Auto, Motorcycle etc type loans. If you buy from a computer, electronics, furniture, department store and apply for credit they will 99.9999% of the time be opening a revoling credit line. As they hope to get you to not only buy that couch but buy spend more in the future with them.

As for needing to pay it off immediately only really matters if you are applying for a loan or credit line soon. Otherwise pay it off before the interest hits and move forward.

[TRC_WA]

I just bought a $2600 living room set from the biggest furniture chain on the west coast...

Got it on a 30 month payment plan @ 0% (roughly $90 a month) and used my girlfriend's (we don't live together) Wells Fargo store account to make the purchase... not because I couldn't get my own account but because I didn't want my own account.  

I made that decision after reading this thread a couple days ago and she agreed because she wants the payment history... her recent scores are 650's and we are trying to fix that.

Thanks for the heads up!  LOL

[Anonymous]

BTW, thank you for posting this!  I went through the same BS with applying for an extra line of credit as well as a few new cards in recent years, TJ Max, Belk, etc.  Each one killed my overall FICO.  I literally have had to hire a firm out of Salt Lake City called Lexington Law Firm and pay them $99/mo to petition old debts that had been paid off as long as 7-8 years ago just to get them off my credit history...........they also petitioned for credit cards I had applied for in recent years too.  

This is what our country has turned into.......

Want more good advice on credit, go to www.daveramsey.com to find out about all these rotten SOB's........and how to relieve yourself of debt!

MM