Those cheap monthly payments on major stores?
Okay I was looking at apple.com and I saw under those Macbook's "[bc6a3c498ba]$1,299 or as low as $31 a month[/bc6a3c498ba]" Can anyone tell me what's the catch if I want to pay my macbook if I go with the monthly payments? I know you have to sign up for their credit card. But other than that, what's the catch? I'm also looking for to apply for a credit card.. so I figure I can kill two birds with one stone if I can apply for a credit card and pay monthly for a laptop. If I choose the monthly payment/sign up for the credit card option, will this affect my credit score? Thanks for your response.
The basic issue with that is that you pay a lot of interest on the laptop.
What may cost $1299 in one payment may eventually work out to $1700 if you pay on a monthly basis.
The "catch" is those monthly payments cost you a fortune in finance charges. Store cards charge a higher APR than most bank cards (assuming your credit is good). I expect Apple's credit card carries an APR from 18-24%, maybe higher. If you just paid the minimum payments on a couple thousand dollar balance, you'd probably be paying for at least 10 years and will have paid out probably 2-3 times the purchase price of the product.
If you don't have a better understanding of how credit works, I'd highly recommend you start with a low credit line card, perhaps secured, and do some research. Going after a low monthly payment is a great way to get yourself in over your head early on. The low payment is so enticing, but you don't realize what you're getting yourself into. You could easily get yourself into a situation where 3-4 years down the road that laptop is pretty much useless junk, and you're still paying for it. Which will suck.
And yes, applying for new credit will impact your credit score. However being approved will improve it provided you don't go and carry a large balance.
Not to mention the fact that by the time you've made 1/10th of the payments the laptop will be out of date.
Dmorris gave great information. If the macbook is something you really need and don't have the cash to pay for it right away then financing is something that you may want to do. But DO NOT make the minimum payment, make a payment that is substancially higher.
Also judging from your post I doubt apple will give you such a high credit line. I know with my first card my credit line was $200.
If you want to build your credt I would recommend like dmorris said and look into how credit cards work and get a card with a low credit line (you may even have trouble with that), and use it often and pay if off every month. I got a credit card about 6 months after I turned 18 (simply because no one would extend credit to me until then) with a limit of $200. It has been two years now and I use my credit card for everything. I carry only $5 in cash with me and pay everything I can with my credit card. I have yet to pay a finance charge and when I apply for a card now I am instantly able to get a limit of upwards of $10,000 with 0% APR for 1 year and 9.99% after that iinstead of waiting a month to hear back whether or not I will be approved for $200.