When to Use Financing

Understanding Your Payment Options

When making a major purchase for your home, it is important to look at all your payment options and determine which one best suits your needs, now and in the future months.

Cash or Cheque
Credit Card
Monthly Payment Plans
Deferrals

Cash or Cheque

It may be best to pay by cash or cheque when you have the available funds to do so although…

• After making your purchase will you be able to maintain adequate funds to cover emergencies or unexpected purchases?
• Investments like RSPs may be a better choice for maximizing long term benefits of your cash.

Credit Card

It is best to pay for your purchase by Credit Card when you plan to pay off your debt in full before the due date.

• Credit cards offer rewards programs but these programs are funded by the higher interest rates they charge customers.
• Carrying higher balances on your credit card will limit your available credit making it difficult to cover emergencies.
• Credit Cards require minimum monthly payments balances that typically only cover the interest. You will pay more interest in real dollars and it will take longer to pay off your debt than with monthly payment plans.

Monthly Payment Plans

Monthly Payment Plans are ideal when making major purchases. Often cash is not readily available as it is invested in GICs, RRSPs, or other long term investment vehicles.

Reasons For Financing…

• Easier to budget for $50.00/month than a one time outlay of $2,000.
• You can purchase the right system for your needs not just the system you can afford.
• Your purchase can't wait however it may take several months to free up the cash. A Monthly Payment Plan can help bridge the gap.
• If you are on a fixed budget, Monthly Payment Plans can help spread the costs of your purchases over time.
• Other emergencies may come up. A Monthly Payment Plan will keep cash available for unexpected emergencies.
• If you have the cash available, is your money better spent in other areas? Consider an RRSP contribution or payment on your mortgage.

90 Day or 6 Month Deferral

Deferral Programs are ideal when you need a grace period to pay for your purchase or just want to take advantage of the “no interest, no payment” period.

Use a deferral program if you plan on paying for your purchase before the end of the deferral period.