Should I Take The First Offer?
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This has probably happened to you; after thinking about something for a very long time, you finally go out and buy it. Before you even get it home you see something that would be even better, but it is too late. You can't return what you have bought and you can't afford the new thing. Something that you were so excited about has now become very frustrating and disappointing. If it has happened to you, you are not alone.
But what if your hasty decision wasn't just disappointing or frustrating, but also very costly? What if your haste was going to end up being very expensive?
This exact situation often happens to people when they are looking for a loan or a credit card. They are excited to have the extra money to spend, or they are desperate for the credit, so they jump at the first offer that comes along without shopping around a bit. They don't consider the interest rate or the terms of the loan or credit card they are signing up for and they certainly don't consider the impact that hose rates will have over the long term.
It is really easy to figure that a percentage point or two on a loan doesn't really matter. It's just one percent, so what impact can that really have, right? Wrong. Dead wrong. Depending on the size of the loan or the balance that you are carrying on your credit card, just one more percentage point on your credit card can cost you tens, hundreds or even thousands of dollars every year.
People often end up with the wrong loan or card because of what they are offered to sign up for it. Whether it is a t-shirt or hat at a sporting event, a CD or MP3 player, points or rewards for a particular store, or low introductory rates, companies have dozens of ways to convince people to sign up for their loan or card. You really have to look at what they are offering, though. If the interest rate is higher than other similar loans or cards then the extra cost over the long term could be much, much higher than the benefit you received from the prize or reward they gave you to sign up.
Instead of jumping at the first deal that comes along, you should take advantage of the resources that are available. For example, use a website or resource which offers you access to lots of loans or credit cards at once. Shop around to make sure you get the best deal. Understand the interest rate you will be paying and the terms of the loan or card. Putting the time in now to get the best deal is sure to make you happier in the long run.
Posted by jonathan on October 26, 2005 at 07:55 PM