Ontario woman who bought $700 computer still paying it off seven years later
An Ontario woman who bought a $700 computer through a "buy now and pay later" loan is still chipping away at her debt seven years later.
Offers to "buy now and pay later" sound like a great idea and often allow you to enjoy something right away before you have to pay for it.
You can often delay payments for one to two years and financing options come in the form of a promotional offer, interest rate deferral or a revolving credit plan.
But they also come with a lot of fine print and if you miss the promotional period deadline to pay back a loan, even by a day, you could have to pay mountains of interest.
"I needed a computer for school and I didn't have the money to buy one," said Allison of Brampton, who asked us not to use her full name.
Allison said in 2014 she was attending school and needed a laptop and was told if she couldn’t pay for the computer she could finance it.
"I wasn't able to pay the full cost of the computer at the time and I was made aware that there were financing options," said Allison.
Allison said seven years ago the laptop had a purchase price of $723. She paid $23 per month for 90 months for a total of more than $2,000.
She was shocked to find out this year she still owed $397 for the computer, because she didn’t realize she signed up for a revolving loan and had mainly been paying interest charges.
"So it was quite a surprising predicament for me. I thought how is that even possible? I've paid for this computer four times already," said Allison.
CTV News Toronto reached out to the financing company and a spokesperson said "Customers that use this revolving credit take advantage of our deferred interest promotions. Most pay off their balance prior to the promotional expiration and thus avoid paying interest."
Pattie Lovett-Reid CTV News' Chief Financial Commentator said people have to be careful signing up for some deferred loans because if they miss the promotional deadline to pay back funds they could be “paying interest, on top of interest, on top of interest."
There are many different financing options including no interest charges for 12 months to two years, but if you don't pay the amount in full by the deadline you could have to pay up to 30 per cent interest over the entire loan period.
"It's often zero down no payments for a year, but a year from now you just don't know what your financial situation will be and some could find themselves in an even worse off position," said Lovett-Reid.
Before agreeing to any deferred payment plan make sure you have a good understanding of the terms and conditions. Allison didn’t, which is why she wanted to share her story to warn others.
If you sign up for a deferred payment plan make sure you write down the date when the promotional offer ends so you can pay the money back before it expires.
Always try to pay more than the minimum payment each month or the item you bought could cost you triple it's original selling price.
CTVNews.ca Top Stories
Stamp prices rise for the third time in five years amid financial woes for Canada Post
Canada Post is increasing stamp prices for the third time since 2019, a move the Crown corporation says is a "reality" of its sales-based revenue structure.
Italy's white-collar mafia is making a business killing
Italy's mafia rarely dirties its hands with blood these days. Extortion rackets have gone out of fashion and murders are largely frowned upon by the godfathers.
The story of how a B.C. man found his birth mother
After his adopted parents died, Dave Rogers set out to learn more about his birth mother. DNA results and a little help from friendly strangers would put him on a path to a small town in England.
WATCH Avian flu: Risk to humans grows as outbreaks spread, warns expert
H5N1 or avian flu is decimating wildlife around the world and is now spreading among cattle in the United States, sparking concerns about 'pandemic potential' for humans. Now a health expert is urging Canada to scale up surveillance north of the border.
Trump fined US$1,000 for gag order violation in hush money case as judge warns of possible jail time
The judge presiding over Donald Trump's hush money trial has fined him US$1,000 for violating his gag order and sternly warned the former president that additional violation could result in jail time.
Summer forecast: What to expect as El Nino weakens
As Canadians brace themselves for summer temperatures, forecasters say a weakening El Nino cycle doesn’t mean relief from the heat.
When grief and AI collide: These people are communicating with the dead
AI tools can offer recommendations, answer questions and 'talk' with users. But some users are using them to recreate the likeness of the dead.
Russia warns Britain and plans nuclear drills over the West's possible deepening role in Ukraine
Russia plans to hold drills simulating the use of battlefield nuclear weapons, the Defense Ministry announced Monday, days after the Kremlin reacted angrily to comments by senior Western officials about the war in Ukraine and Moscow warned that tensions with the West are deepening.
Spike in 'violent rhetoric' since Oct. 7 attack from 'extremist actors,' CSIS warns
The Israel-Hamas war has led to a spike in 'violent rhetoric' from 'extremist actors' that could prompt some in Canada to turn to violence, the Canadian Security Intelligence Service warns.