Hire Purchase – Beneficial or a debt trap for consumers?

As Christmas bells start ringing it ushers the season of buying and shopping.  Often consumers are flooded with images of various items they can buy now and pay for later.

Companies often use attractive packages to make these deals appear irresistible and snare the unsuspecting customer.  For example, one furniture company offers a ready discount card for hire purchase customers that rewards them with discounts up to 15%  when shown at selected companies.

I wonder though if the cost of hire purchase is simply too high?  Consumers often pay for the item several times over what they would have paid in cash.  The interest payments vary among companies but there is a very real risk of overpaying for the item.

Consider too that after making a number of payments you are faced with an unexpected expense and can end up losing the item and all the previous payments.

So is it worth it to buy now and pay later?  You be the judge!  Let me hear from you! Do you think Hire Purchase agreements are beneficial for consumers?

- Teri Ann Renee Paisley (Gleaner on-line writer)

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4 Responses to “Hire Purchase – Beneficial or a debt trap for consumers?”

  1. Claudette says:

    I think hire purchase is very beneficial, as it helps persons like me who cannot afford to pay cash to have what they probably would never have if they sit and wait for when they have the cash. My home is now well, and I say well furnished, and believe my husband and myself are not highly paid. We have mortgage and monthly car payment, among others, utility bills and 2 children to send to school, one in high school. So I would encourage anyone to do hire purchase, but do not calculate the final price or else it would mad you, trust me.

  2. HirePurchaseistheDevil says:

    I believe hire purchase is a trap. A lot of consumers do not check out the facts or maybe they are aware but circumstances prevent them from doing better means paying 25% or higher on the cash price. I much prefer to take the $$ i would use to pay hire purchase, save it in a bank a/c or in a envelope under my bed and go buy the item cash once my money has accumulated

  3. One day at tIme says:

    Hire purchase is a trap. If you can avoid going that route, by all means, avoid it. Sometimes you end up paying two to three times more than the cost price. Its better sometimes to just save that money now and buy the item later.

  4. teriann says:

    Well I guess some people might not be able to have the discipline to save for such a long time to afford the product but it certainly is a good idea!!

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4 comments so far
teriann Posted by: teriann December 19, 2011 at 7:32 pm