Consumers shop for computers based on price, processor speed, memory and other hardware factors. However, very few consumers examine computers from a financing perspective. How you are going to pay for your new computer and what your interest rate is going to be, are two very important factors that computer shoppers should consider when buying a computer.
After careful online research, CreditGUARD of America picked Apple.com, Dell.com, Gateway.com and HPShopping.com for their outstanding computer financing options. Our credit counseling company examined these computer companies primarily for annual percentage rate, minimum monthly payment and late fees.
Apple.com offers Instant Loan Program though MBNA. The Annual Percentage Rate (APR) can be anywhere from 9.99% to 26.99% depending on the consumer’s credit score. While the existing literature did not mention the penalties for paying late, it did state that the consumer’s APR could change if payments are late or only partially paid.The loan term is 60 months and the minimum monthly payment depends on the loan amount. There are no pre-pay penalties for paying the loan off early.Computer Financing Evaluation: Apple.com offers competitive financing terms for consumers with good credit. Individuals with bad credit should look elsewhere for more cost effective financing terms.
Dell.com offers the Dell Preferred Account, a revolving line of credit, through CIT Bank. The Annual Percentage Rate (APR) can be anywhere from 7.99% to 27.99% depending on the consumer’s credit score.Qualified consumers can get special payment terms such as first 90 days without payment. Minimum monthly payment is 3% of the existing balance, and there is a $25 fee for late payments.Computer Financing Evaluation: Dell.com offers some of the best and worst computer financing rates. For consumers with good credit, Dell.com offers some of the best financing rates. For consumers with bad credit, Dell.com has some of the highest interest rates in the industry.
Gateway.com works with three different banks to offer a wide variety of financing terms. Fill out one loan application and get submitted to American General Bank, MBNA America and Citibank USA.American General Bank offers a revolving line of credit at an Annual Percentage Rate (APR) from 0% to 24.99% depending on the consumer’s credit score. Their minimum monthly payment is 3% of the purchase balance. Late payments are assessed a fee of $30.MBNA America offers a revolving line of credit at an average Annual Percentage Rate (APR) of 14.9%. Their minimum monthly payment varies depending the balance. If the consumer pays late, they are charged $29.00Citibank USA offers a revolving line of credit at an Annual Percentage Rate (APR) from 14.90% to 27.99% depending on the consumer’s credit score. Their minimum monthly payment varies between 2.778% and 4.844%, depending on the payment plan the consumer selected at time of initial purchase. Accounts that are paid late are charged $35.00.Computer Financing Evaluation: Gateway.com offers the most versatility in the computer industry. The advantage of being submitted to three lenders at the same time saves the consumer a lot of legwork. For consumers with very good credit, Gateway.com beats the competition with 0% financing. However, because the banks are pulling your credit report separately, there will be three inquiries for credit, which can negatively impact your credit score.
HPShopping.com (Hewlett Packard/Compaq) offers a credit card through Household Bank. This computer company currently offers a 1-tier Variable Annual Percentage Rate (APR) of 14.4% plus prime, which equals to approximately 18.4%. With a variable APR, the “prime” rate changes based on current market rates so monthly payment may fluctuate. Late payments are assessed $29.
HPShopping.com is moving to a 4-tier Variable APR in the near future, which will consist of 4.9%, 9.9%, 13.9% and 17.9%, plus prime rates, based upon your credit rating, to allow for greater versatility in financing options.
Computer Financing Evaluation: HPShopping.com gets the gold star for customer service. Of all the online computer companies, HPShopping.com’s customer service was the most responsive to our evaluator’s inquiries. Their new 4-tier Variable APR will be extremely competitive to Apple and Dell. Put your computer financing on hold until the new financing options are in place.
All of these computer companies offer excellent financing options for consumers with good credit. When you apply for computer financing, be sure to examine your APR, minimum monthly payment, late fees and other special financing terms. Individuals with bad credit may want to examine other financing options before committing to high interest, computer financing.If you have bad credit and would like credit card help with improving your credit score.
Please note: these financing terms stated above are subject to change, and the findings are based on a March 2004 case study that examined several computer companies and their online financing options. Please contact companies directly to find out current financing options.