Buying ‘big ticket’ items: filling your home with no upfront costs
There’s no getting away from the fact that moving home costs money. Even after you’ve paid legal fees, a deposit and perhaps stamp duty, there will be things that you need to buy. So how can you pay for those ‘big ticket’ home items – such as kitchen appliances, sofas and bedroom furniture – when your pot has run dry? Here are some options to consider:-
0% interest credit cards: if you need to splurge on stuff for your new home, taking out an interest-free credit card is a good way to spread the cost at no extra charge. And, as the Money Saving expert explains, you’ll get Section 75 consumer protection when you use your credit card to make purchases over £100. You can use comparison websites, such as comparethemarket.com, to find the best 0% rate interest credit card with the longest zero percent period – which can be up to 24 months.
When using this funding method, set a reminder to clear the balance at the end of the interest-free period or you’ll risk being automatically switched to its regular (much higher) interest rate. Can’t clear the balance at the end? It may help to do a balance transfer to another 0% interest credit card when the time comes, although there will be a small fee for this service.
Pay in instalments: if you’ve ever shopped online, you may have seen the option to pay in instalments. Companies, including Klarna, Splitit, Clearpay and PayPal’s Pay in 3, offer shoppers the option to split paying for goods into three equal payments. The first payment is made at checkout, with two further payments due typically after 30 and 60 days. Theoretically, this allows the buyer to benefit from two more ‘pay days’ to clear the balance, without being charged interest.
If you miss a payment, you could ruin your chances of using such payment plans in the future or even hear from debt collection agencies. Look for an option that withdraws each instalment automatically or set up a direct debit so you never miss a payment.
Take out a loan: it’s important to know whether you need a personal loan or a home improvement loan. You can use the former to cover the upfront purchase of white goods, flooring and furniture, for example, while the latter is reserved for renovation works and can come in the form of either an unsecured personal loan or a loan secured against your home.
A personal loan can be taken out to cover the cost of multiple big ticket items when you’re furnishing an entire property, for instance. Reading Which?’s Guide to Personal Loans is a must before you make an application, and always use a comparison website to find the best interest rate and repayment term for your circumstance.
Payments and your credit score
It is definitely a case of buyer beware! Read the small print and recognise if your chosen payment method is actually a credit agreement. While taking out a credit card and making regular, timely payments can improve your credit score, falling behind with or missing payments can damage your credit rating.
It’s wise to check your chances of being accepted for finance by getting a credit report before you start applying. This can be obtained for free at ClearScore and other credit reference agencies.
Find free items
If you’re not keen on taking out credit or spreading the cost of a shopping spree, there is an alternative. The internet has revolutionised how we dispose of unwanted items for the home, with Freecycle, Gumtree and good old Facebook full of freebies. Of course, when items are offered at no cost, there is no consumer protection. Plus, you’ll usually have to make your own arrangements to collect the goods – with no guarantee they’ll work ‘as new’.
If you’re planning on moving home soon, get in touch for buying, selling and renting advice.