Buzz
If you're low on funds and in need of appliances like a fridge or furniture, you may be tempted by 'rent-to-own' options. These stores allow customers to pay for items in installments over time. However, Consumer Reports explains why this might not be the best choice financially.
In the video above, Consumer Reports breaks it down, but their money editor, Mandy Walker, simplifies it even further by saying:
If these deals were classified as loans, the interest rates would range from 50% to 150%. The ads and contracts often hide fine details, and many consumers don't realize the actual cost involved.
Consumer Reports specifically calls out Aaron's and Rent-A-Center, two of the leading rent-to-own stores. Under typical plans, you might make monthly payments for two years before fully owning an appliance at its listed cash price. They found that some of these plans could end up costing consumers hundreds more than simply purchasing the item outright.
It’s a classic trap of debt, which is further explained in the linked article below.
