Posted on 10/21/2014 8:49:47 AM PDT by knak
CULLMAN, Ala. — The love seat and sofa that Jamie Abbott can’t quite afford ended up in her double-wide trailer because of the day earlier this year when she and her family walked into a new store called Buddy’s. Abbott had no access to credit, no bank account and little cash, but here was a place that catered to exactly those kinds of customers. Anything could be hers. The possibilities — and the prices — were dizzying.
At Buddy’s, a used 32-gigabyte, early model iPad costs $1,439.28, paid over 72 weeks. An Acer laptop: $1,943.28, in 72 weekly installments. A Maytag washer and dryer: $1,999 over 100 weeks.
Abbott wanted a love seat-sofa combo, and she knew it might rip her budget. But this, she figured, was the cost of being out of options. “You don’t get something like that just to put more burden on yourself,” Abbott said.
Five years into a national economic recovery that has further strained the poor working class, an entire industry has grown around handing them a lifeline to the material rewards of middle-class life. Retailers in the post-Great Recession years have become even more likely to work with customers who don’t have the money upfront, instead offering a widening spectrum of payment plans that ultimately cost far more and add to the burdens of life on the economy’s fringes.
The poor today can shop online, paying in installments, or walk into traditional retailers such as Kmart that now offer in-store leasing. The most striking change in the world of low-income commerce has been the proliferation of rent-to-own stores such as Buddy’s Home Furnishings, which has been opening a new store every week, largely in the South.
(Excerpt) Read more at washingtonpost.com ...
You can rent-to-own a wedding ring?!?!?
That one goes into the "Learn something new every day" file.
Usually I have used that in anticipation of a tax refund.
Like it or not, when you are poor or have bad credit, most of what you have to deal with are sucker deals.
$200 doesn’t sound like much, but when you are poor, its more than you know you are likely to be able to scrape together.
Financing of some sort is the only way you are going to get it.
Sadly if your income is low and/or your credit is poor, you won’t get financing for any reasonable means, and retailers know it.
Not defending their businesses but that’s the reality of the game. The idea of finding $20 a month for something vs a few hundred all at once is a big reality.
Yes, they’d be better off scraping up $20 a month for 10 months and going to buy it, but like most poor, if there isn’t a bill its dedicated to it will get spent on something else... and no not all of that is frivolous.
Same deal with the tote the not used car places... needs a car to get to work, but credit is terrible, so has no choice but to finance at rates that are insane.. as such spends far too much of their income on transportation, and this keeps them further down than they should be even though they are working.
Poverty is not a fun place to be, poor and bad credit is an even worse place to be.
I don’t think a refrigerator is a want, or a washing machine and dryer... do you absolutely need to own one? Nope, but you’ll drop far more of your time and money at a laundromat every week and living without a fridge is no fun either. Layaway is generally a better deal, but even that is rare to find these days.. KMart still has it year round, WalMart only brings it out around the holidays and doesn’t sell appliances etc.
Sometimes a person has a need that needs to be done, however its not just the poor who get sucked in. My scum ex brother in law made 60k a year had about 1000 dollars a month in normal expenses(lived in a trailer) yet spent 3000 a month on rent a center crap.
Literally every piece of furniture, electronics and appliance in the house was from them. He even had a buy here pay here car. I kept telling him he was stupid, I showed that I 20k less and yet had a brand new car, new computer I paid in cash, new TV etc...all with out going into a mind numblingly bad cycle of living month to month.
Exactly, and not everyone qualifies for that no interest option... you have to meet credit and income requirements.
And you are absolutely right, if you don’t pay it off before the free interest ends or are late on a payment, you get hit with retroactive interest to the start of the loan.
Never be embaressed!...My fiance and I own everything we have...I have a pre-paid credit card I put CASH on for on-line purchases and the exact amount also...total cost is 3 dollars per loading of the card and done. I constantly get credit card offers for 5000.00 and more at the “introductory” great rate....We have old furniture and “mason jars buried” as the old saying goes...we are not rich but do not go without....a fool and their money are soon parted.No sympathy here ...credit worthiness is a joke...cash will always be king.
Most of the furniture we have are antique’s and came from Garage Sales, Thrift Stores and Antique Stores. All of our new furniture for the past 25 years has come from either Costco, Sam’s Club or Ikea. We have never paid more than $500 for a Sofa and that was for a huge, very nice leather sofa on clearance at Costco.
We once had usury laws, and most of this sort of thing would be illegal.
The people who actually pay get screwed because they end up covering the costs incurred by renting to the ones who never pay the bills....
Just like us taxpayers.
Yes. Old Chet (Then a teenager) was a big fan of the Fabulous Furry Freak Bros.
The I-stopped-reading-when quote: "Perhaps she could have saved up the money on her own, but whenever she has tried to do so, her stash has been wiped out to handle daily needs." If daily needs wipe out your savings for a nice couch, you certainly can't afford a nice couch with a 3x markup.
When we were younger, most of our furniture came from the side of the road. We took it home and spent around $20 refurbising it. Twenty years later, we still using some of it.
I have seen the rent to own ads on TV for laptops with weekly payments. The first months weekly payments would be more than the cost of going to Wal Mart and buying one of their $300 laptops. I’m sure the laptop they are selling probably isn’t worth more than $300.
“no interest if paid off in ‘x’ months”
Completely agree. Best alternative to paying cash.
But the folks that go the RTO route generally don’t have the cash, and probably do not have the credit to buy with deferred interest.
I hear ya, but I gotta say, my wife and I live off my income which, while decent, is a far cry from pulling us out of poverty. We live cheap, we eat cheap and we sacrifice an awful lot. I have friends who use these services and eventually find themselves on hard times. I've watched many a friend have furniture, including couches, love seats and big screen TV's lose it when they fell on rough times.
We very briefly considered RTO, but fell back to our original resolve of, if we can't pay cash for it, we don't need it. I'm thankful we did. Instead, we saved until we had the cash and went and bought the freezer outright. At least now I know that, should we find ourselves in a bad financial spot, I won't have anyone coming to repo the freezer. Lol.
I think it's part of the bigger issue in America: We gotta have the best and the newest, we gotta go bigger than the neighbors, and we gotta have it now. All very false premises. We have done very well by taking the "can't pay cash/don't need it" approach. I think most would be much happier and less in debt if they did!
See #113.
Yes, some things (car) may be necessary for vital purposes (job). Some things (refrigerator) are practically necessary (food storage).
But some things (car, refrigerator) are best obtained in a humble manner (fewer features, used). And some things (new couch) aren’t necessary at all, and the inability to set aside money for such things is a Red Alert that you shouldn’t obligate yourself to getting one at an outrageous price.
Get a dirt-cheap used car, and pay yourself the “payments” for the upgrade.
Get an inexpensive no-frills refrigerator/washer/dryer/etc. Craigslist has people _giving_ them away just because they’re a hassle to move.
Build the couch yourself if you can’t afford one ... because you can’t afford one.
Like most of the people here, I know that most rent to own schemes are a rip off. But there a couple of things to note about the article:
1) the author’s assumptions about what the average person pays for household goods
2) the lack of emphasis on the importance of thrift— the lower you go down the income scale, the more important it is.
“We live cheap, we eat cheap and we sacrifice an awful lot.”
And that’s what a lot of people refuse to do. They “deserve” better, they want it and explicitly don’t care what the consequences are of getting it.
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