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My dilema, need lots of info, might be last post from me :/

post #1 of 39
12/6/03 at 2:55am
Thread Starter 
Hey everyone,
I am sad just got off the phone with my cousin, who is using american express to pay monthly. She talked to her bank and they said that the first month I would be charged a crazy price of $70 interest. I was expecting 10 dollars then I would be okay with it but 70 is way too much. I know it changes gradually but by the time i end up paying for the whole thing, It would be enough to buy another computer.
I also applied for the alienware credit card and got approved.
What does this mean?
Annual Percentage Rate: 21.90%. Minimum finance charge: $1.00.

I don't have to pay for the first 6 months?
And If I do, after the first 6 months I wouldn;t be charged interests of any sort so its exactly like cash?
Annual Percentage Rate: 21.90% this is what I'm confused because I don't have a credit card myself so I have no clue what this does. WOuld I still be charged interest? WHat are the small labels because the 21% doesn't look good at all
Also how is the process of obtaining the card? Can i order the machine even If I got approve but not wait for the signature part, because the email just asked for a picture to finalize it. Is this there new way of making it easier to obtain a card?

SORRY for the questions but I am really stumped, I spent the whole week refreshing, reading all the threads, checking review sites and I don't know what I should do :/

This really blows, I spent 30min-1hr talking to a rep today and decided to add the alienware adrenaline.

I hope everyone doesn't have to go through this and enjoys there alienware 51m, hopefully me too
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post #2 of 39
12/6/03 at 3:13am
Welcome to the world of "Compound Interest". Its a nasty world, but it's how many of us Americans afford to live beyond our means.

Yes, if you use the AW credit card, you won't have to make a single payment until 6 months...BUT...if you wait 6 months and have not saved enough to pay the entire balance off, they hit you with ALL OF THE INTEREST from the past 6 months.

The math goes something like this:

Cost of laptop: $3500
Annual Percentage Rate: 22% (approx)

So multiply 3500 x 1.22 = 4270 minus initial cost of 3500 = $770 in interest in one year divided by 2 (6 months same as cash deal) = $385 interest tacked onto your inital $3500 balance.**

Now of course as you pay montly your principle (initial amount owed) goes down and coincidentally so does your amount of interest along with it. So the only, sensible, reason to use the AW credit card is this:

Buy the laptop. Deliver as many papers, mow as many lawns, walk as many dogs as you can for 6 months and when half a year comes past, pay off as much as you can if not all of it.

-Craig

**disclaimer**
I am in no way a CPA but have bought enough cars in my life to understand how this works. My numbers are approximations and are by no means what you will end up paying exactly. Be warned: Interest Rates as high as they are stating (which often times are ADDED to the Prime Rate) are in no way a good deal for the end consumer. You will end up spending almost $5000 for this computer with minimum payments over 3 years.
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post #3 of 39
12/6/03 at 3:32am

After you use it....

After you use the credit card and have paid off the balance.....BURN IT!!! It is the devils toy he uses to manipulate your life.
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post #4 of 39
12/6/03 at 3:37am
One more bit of advice:

If you can't swing paying for the computer in cash and need to use a credid card, go to your bank, a local credit union, a reputable credit card company, ANYONE but a direct retail card and get yourself the lowest interest rate possible.

What will really mess with your head (as if the post above wasn't bad enough, I know) is imagine if you put $3500 in an investment account (instead of buying a computer) for 20 years with an average return rate of 15% a year. You'd earn $525 in the first year alone...after 20 years imagine what you'd have saved up

Heh, but hey, we wanna frag!! G'night everyone!

-Craig
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post #5 of 39
12/6/03 at 3:43am
Quote:
Originally Posted by CharlieBox
After you use the credit card and have paid off the balance.....BURN IT!!! It is the devils toy he uses to manipulate your life.

Which card are you talking about? The Alienware one? Yeah...maybe...

Other cards - destroy them and you have just destroyed your entire credit history.

My suggestion - Use your normal credit card, AMEX or VISA or whatever - build your credit history and NEVER cancel a card unless it has been compromised - you will, in a single stroke, erase every little bit of your credit history that you built using that card...

And my friend - $3500.00 and paying it back will take you quite a long way as far as your credit history is concerned...

Be sensible...
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post #6 of 39
12/6/03 at 3:44am
Thread Starter 
Thanks Craig!

It came out to 813.78 so letme get this straight.
for the first 6 months i save up lets say 1000 dollars.
Then I would have to start paying the 70 dollar interest again?

Is it worth it?

I'm suppose to pay 111 each month so after the 6month how much a month do you think I'll be paying on avg?
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post #7 of 39
12/6/03 at 3:46am
Thread Starter 
this is what the bank told her and she used american express to pay for it
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post #8 of 39
12/6/03 at 3:50am
Thread Starter 
Thanks for the advice gsferrari but the thing is If i was willing to give my cousin 300 dollar a month, it would be another 210 they will be asking for. She normally pays in full so this interest thing is high for her. Does it get gradually alot low like 10% in a year
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post #9 of 39
12/6/03 at 3:51am
Thread Starter 
Quote:
Originally Posted by CharlieBox
After you use the credit card and have paid off the balance.....BURN IT!!! It is the devils toy he uses to manipulate your life.
Hehe definetly
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post #10 of 39
12/6/03 at 3:53am
Quote:
Originally Posted by shyy
Thanks Craig!

It came out to 813.78 so letme get this straight.
for the first 6 months i save up lets say 1000 dollars.
Then I would have to start paying the 70 dollar interest again?

Is it worth it?

I'm suppose to pay 111 each month so after the 6month how much a month do you think I'll be paying on avg?
No...You can't look at it as saving any money because you are not going to be able to pay it off in 6 months. Every last cent would hit you (on the amount you still owed) UNLESS you paid EVERYTHING off in 6 months.

Basically this is not a good deal at all. I can't be any more blunt. Listen to Ferrari and I...our advice (and thats all it is, advice) is for you to get a different credit card with a lower interest rate. This will build your credit while allowing you to own a nice laptop.

The Alienware credit card offer is going to cost you LOTS of extra money. But, its your dough.

-Craig
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post #11 of 39
12/6/03 at 3:57am
Quote:
What will really mess with your head (as if the post above wasn't bad enough, I know) is imagine if you put $3500 in an investment account (instead of buying a computer) for 20 years with an average return rate of 15% a year. You'd earn $525 in the first year alone...after 20 years imagine what you'd have saved up
You will have $57,282.88
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post #12 of 39
12/6/03 at 4:07am
Thread Starter 
I got 10500, 20x 525

Whats a good credit card that has low interest rate?

I did some math. I can probably save up at least 1500 in the whole 6 months
which leaves me $2199 more to go. So the max I would paying interest is around 483.78?
I took 2199 x 1.22 = 2682.78 - 2199
Sorry If I'm making no sense, its 2:18 am and its so hard to sleep
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post #13 of 39
12/6/03 at 5:06am
Well i recently bought a laptop from Hypersonic. ~2000 and change so i charged it on my mastercard and transfered the balance to discover card who currently has 12 months no interest on balance transfer w/o transfer fees. so basically I have til december 2004 to pay it off.
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post #14 of 39
12/6/03 at 5:17am
Thread Starter 
Thats nice!
I'm going to ask my cuz to get a discover card, hope that 12 month no interest thing is given upfront
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post #15 of 39
12/6/03 at 5:39am
Quote:
I got 10500, 20x 525
You have to calculate that you get interest on the interest, year 2 you get 15% of ($3500 + $525 = $4025) which is $603.60. It grows rather rapidly as you can see, $57000 differs from $10500.
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post #16 of 39
12/6/03 at 5:44am
shyy,

Obviously you do not have the credit to do this on your own. But if you do things right, you could make a small portion of the purchase price on your Alienware card so that you can begin to build your own credit. This way, your next purchase will not have to rely so heavily on family and friends.

Family by the way may extend credit easier than creditors, but can beat you up if they don't get paid.
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post #17 of 39
12/6/03 at 2:19pm
I'm not sure you guys are understanding what it says on the website

No finance charges doesn't mean that you don't have a monthly payment every month. Every loan that you have, you will have a Principle amount and an Interest Amount. I don't see where the Alienware website says "NO PAYMENTS FOR 6 OR 12 MONTHS" This means that you have to pay a certain amount every month, but they will not tack on interest for a certain amount of time
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post #18 of 39
12/6/03 at 2:50pm
Thread Starter 
Yea I do have no credit, didn't get approved since I have no bank account as well. So the first 6months I would be paying 666 and as much as I can, then the 22% starts taking effect.

Did anyone do this? How was the process and all? Did they email you to send identifaction picture and also send a signature contract to be signed?
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post #19 of 39
12/6/03 at 3:07pm
Quote:
Originally Posted by smileytim
I'm not sure you guys are understanding what it says on the website

No finance charges doesn't mean that you don't have a monthly payment every month. Every loan that you have, you will have a Principle amount and an Interest Amount. I don't see where the Alienware website says "NO PAYMENTS FOR 6 OR 12 MONTHS" This means that you have to pay a certain amount every month, but they will not tack on interest for a certain amount of time
The won't tack on interets for the entire purchase if you pay it off within the first 6 moonths...but if you don't, they they hit you with ALL of the interest from those first 6 months. They call it Retro-Interest or some nonesense.

-Craig
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post #20 of 39
12/6/03 at 3:56pm
Shyy,

Alienware will not charge your Alienware credit until they get the hard copy app and a copy of your license. Your order will stay in PHASE 2 until they receive it.

I suggest charge an amount you can handle to pay off within 6 months on the Alienware credit so you can also build your credit. The other portion you ask family to help you with and make arrangements with them.

It IS 6 months no interest - not 6 months no payments.
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