When people tend to have bad credit, they find that they can’t get approved for things such as a credit card.  Since most people don’t focus on what they should, which should be rebuilding their credit and paying it off, they tend to want to keep up with the Jones’ and buy all the fancy things when they can’t afford it.  This is where “rent to own” comes into place.

Rent to own is generally a rip off.  Sure, you can get that big widescreen TV for $20 a month but after you rent it for 4 years, you can only pay $500 to keep it!! It sounds like a great deal, doesn’t it?  What most people don’t think about is the future and how much money they are dumping into these stupid schemes.  Let’s use an example below.

I looked online and found a major retailer that offers “rent to own” everything from TVs to Furniture, I’m sure you know who I’m talking about.  Anyways, I called them up and acted like I wanted to purchase a 37″ LCD HDTV.  Here’s what they told me and made it sound like a great deal!

For $36.35 a week, I could rent the TV.  I could rent the TV up to 142 weeks, which would be about $5,000-ish.  Now, if I wanted to buy the TV at any time, I could get it at a steal @ $2,400.  Wow! After doing some research online, this same TV retails at $1,200. 

People tend to look at the $36/week and think it’s a steal for a “$2400″ TV that really costs $1,200 at a cheaper online retailer.  Rent to own is never good.  These companies are in it for a reason, they are looking to make a profit like any other business.

The main thing to remember here is that when you’re in debt, don’t worry about items in your house.  Instead, care about your own financial needs.  Go out there and get more than one job and attack your debt like there’s no tomorrow.  Once you get your finanical needs in place, go out there and buy things in cash.  There’s no reason to rent that TV when you can own it for the actual retail price in the future!