Thinking of buying television set, a lounge suite or a fridge? Your best bet is to pay cash. But if you have to buy on credit, finance your purchase through your credit card rather than through the store.
If you buy on hire purchase through a furniture store, not only will you pay higher interest rates, but you'll also pay interest on a host of other charges, from delivery to insurance. In addition to short-term insurance, to cover damage or theft, some stores try to sell you life insurance and disability insurance, retrenchment insurance - and even funeral insurance. If you want insurance, you'd do better to buy it independently.
Furniture dealers tend to charge the maximum interest rate allowed under the Usury Act - 24 percent a year for goods costing more than R6 000 and 27 percent a year for goods worth less - and these rates apply for the term of the contract.
On your credit card budget plan, you'll pay 24,5 percent a year or less and you'll benefit from a cut in interest rates if there is one. It's also easier to wind up the contract if you want to pay off faster.