Debt Trap #4: Rent to own
These companies allow you to buy appliances, furniture, and even computers, through a weekly rental payment plan. The two major problems are:
- When you add up the weekly payments, you will always be paying several times more than the fair market value of whatever you're renting!
- If you miss a payment, the store will take the merchandise back, no matter how much you've already paid for it.
In the age of Carousell and Ebay, furniture, electronics and appliances can now all be bought at a fraction of their retail price. If you don't have the money to buy something outright, consider purchasing it used before signing up for rent-to-own.