A question about financing

I can't wait until Monday to know the answer so I'm asking other Alienware acct holders. I recently obtained an Alienware acct and purchased an m15x with it on Friday (w000t!). My question to all of you is how the financing works. I know the APR is 26.99% which is insanely high. I did not qualify for the 6 months no interest. So does that mean my first bill will have the interest rate stacked on?

I only charged 1900 to the Alienware acct and used another card for the rest to lessen the blow. But if I get charged 26.99% on 1900 thats still over 500 bucks in interest. Is that how it works? Do they give you a month before the interest kicks in?

I'm going to read the official site and see what it says but I'm having trouble making heads or tails of it. Any help to my question would be most appreciative.

 

don't get finance you will get ripped off just go to your bank and get a small bank loan. You will fall for it if you think it's easier to deal with AW finance, they don't have their own finance they will refer you to some 3rd party that will rip your legs and arms off to steal your money every way possible with huge interests and crazy money fees plus account keeping fees and other fees.


just go to your bank and get a bank loan, if you could get finance from AW you could also get a bank loan with smaller interest charges.

trust me on this one.

 

Yeah, I'm probably going to end up doing that. But I just hope that they don't jump on me in the first bill. I'm still in phase 2 atm. I guess I'm just worried about the first bill. I can probably do as you suggested and get a loan to pay it off with my bank. But if the first bill has 27 percent interest they just made an easy 500 plus dollars on me. @___@#

 

yeah don't ever go for AW finance you will get burnt.

Financing a commodity that is going out of fashion fast has huge implications therefore the financiers will charge you exorbitant interest rates and other fees to cover their loss just incase.

Better to get a small bank loan then pay it off that way. Don't use credit card as it will cost you just as much as AW finance in the long run.

 

ok...
soo..i had this exact same question before i purchased my laptop..

i talked to a person and they told me the interest is tacked on the first bill. They dont help you out.

That is how i understood it, you dont get that first month without it, Im not 100% positive though

 

The APR describes the interest rate for the entire year. Interest is usually compounded monthly, so to calculate how much you will have to pay per month, you take the APR and divide it by 12. A 26.99% APR translates to a 2.249% ( 26.99%/12) interest per month, which means a $1900 purchase will cost you ( $1900 x .02249) $42.73 a month.

As your debt decreases, the amount of which you pay in interest will decrease-- so say your balance is down to $1000 (meaning you were able to pay off $900 of your balance during the first month), the amount for which you will have to pay in interest for the second month will be ($1000 x .02249) $22.

The sooner you pay off the outstanding balance, the less you have to pay in interest. You'll feel a few pinches here and there from this, but on the bright side, you're essentially building credit which is good!

APR = Annual Percentage Rate. They aren't going to tab 27% on the first bill straight out like that so you won't have to worry about that.

 

remember the finance charges.
like u pay a certain amount per month + finance charges

 

Sounds like you're playing a credit game that's going to cost you down the road...seriously - don't get the laptop if you have to finance it at 27% (and that's just the starting point)....

 

mmm close, but its actually figured on a daily basis not monthly. So it would be 26.99/365*days in a month. The reason you do that is because they charge you interest daily up to the point the account is paid off. Thats why when you are going to make your final payment you need to call them up and ask for a payoff balance, or just overpay your last bill by $20+. Say your bill due date is on the 15th of every month "yah right, most banks like to change it randomly". That means from the 15th to the following 15th you are charged interest on the balance on the account. When you get that last bill and pay off the account, by the time you receive it, there is already at least 1 days worth of interest being added to the account. If you don't overpay the account, once you think you have paid the account off then next month you receive another bill or worse you forget about thinking its been paid off.

I used to explain it to clients in a way that they can understand a little better like this. If you have a savings account you will notice on your monthly statement that the bank pays you a daily interest rate based on your account balance. If you where to close your account on the 15th, you would would expect to receive that interest just as the bank expects their interest paid when you pay off a credit line.

Right now though as others have stated you should completely avoid alienware/dell financing. As far as I know there is actually a big lawsuit going on with them because 99.99% of people that try for financing do not get the advertised promotion. That's bate and switch and is a serious offense.

I usually recommend a credit card to members looking to finance a computer. The reason for this is, while its hard to get a low purchase apr on a credit card, getting a 1 year 0% balance transfer apr on a credit card isn't hard at all. You can open the credit card and once you receive it call up your lender and tell them to do a balance transfer into your checking account and it will go under the 0% apr. There is usually a 1-3% fee on the balance transfer, but compared to how much you would pay in interest its well worth it.

 

Haha, I had a feeling I messed up somewhere. Hmm, so if it's compounded daily it would be $1.40 a day ([.2699/365] x $1900), right? That comes out to $42.15 a month (or per billing cycle)-- I think.

Well! All the more reason to pay it off sooner.

I think 99.99% is an exaggeration, though I would have never thought they would jip people this way. I have been financing my AW notebook through Alienware/Dell Financing and I haven't had to pay interest yet though I am fairly wary of what they would do if I missed the last payment.

 

Thanks for the detailed breakdown, Oceanus. I truly appreciate it. I was worried about how that first bill would stack up and if it's the way you describe I should be fine. I'll be making 700 dollars in payments each month.

What's really strange is that I was certain I was about to recieve the no interest for 6 months deal. I have a Dell Preferred acct with a substantially bigger limit but Alienware stuck me with the interest payments. My credit is actually pretty good so it initially threw me. Maybe after a year or 6 months they'll upgrade my acct for future purchases. Hopefully. ^^

 

The financing for AW is done through Dell but the name behind the Dell Finance is CIT (Not Citibank). The only problem is that you cannot use your Dell Card for an AW purchase and same thing with the AW card for Dell. So go figure?

 

Dont forget they also charge you for paying out early. IT's called early fees.

They have fees for everything they could make up.

 

What are you even talking about?

 

The finance company will charge you fees for paying out your finance early - it's called early fees.

 

I think you're getting that mixed up with long-term loans. I doubt they would charge early finance fees for credit cards.

Edit: I really wish I could find my terms and conditions pamphlet right now (I'll have to go find that later), but unless you have cold-hard proof that Alienware charges early finance fees, I'll have to dismiss your claim.

 

i was talking in general - most financiers charge money for paying out early but if this is a credit card then maybe you are right.

 

Maybe in Australia, but not here. =P

 

>.> it is possible there is a early payoff fee if you have the 6 months no interest, its also possible they compound the interest for those 0% 6 months and if you don't pay it off before the promotion expires you get that interest added to your next bill. Off course none of that would apply if you didn't get the 0% apr promotion.

 

I'll have to check my Terms and Conditions pamphlet later to see. I have doubts about an early finance fee though.