Using Credit Cards to Deck Out Your Truck

Jul 7, 2015

If you work in a shop, you have seen the tool trucks drive around, and you might even look forward to a trip on the trucks. The walls are lined with attractive toys and tools, but sometimes you just can’t afford them, even though you really need a new toolbox. The one you have now just won’t cut it, and the tech in the next bay over just unloaded the latest model. You can’t pay, so the driver tells you about a credit card to help you pay for the sweet new tools or a brand new box. But before you sign up, here’s what you need to know.

1. Get to the nitty gritty of the interest rate

Guess what: the interest rate is nauseatingly high. Yes, the idea of getting your box right away and paying it off over time sounds great, but how much is really going to the box, and how much is being dumped into the interest? The answer might surprise you. If the representative tells you to make $30 each week, which results in a $120 monthly payment, more than 50% of what you pay will actually go toward interest, not the principle. If you have $3,000, you do the math. Ask about the interest rate, and do not focus solely on the minimum amount the representative is telling you that you can make each week.

2. Be realistic about the introductory offer

Okay, so what if the pitch is an introductory offer? No interest for 6 or 12 months. Sounds good, right? If you can’t pay for the box or tools now, will you be able to do so in the next few months. Be realistic when you ask yourself if you can really afford it. When you do get hit with interest, it is going to hurt.

3. Payments on the truck, not so fast

Okay, you opened the card and the representative is telling you that you can still make payments on the truck. It should knock down your monthly payment amount that you have to pay to the card company, right? Not usually. Some companies allow you to pay the tool guy/girl when the truck arrives each week, but you still have to pay the monthly billed amount directly to the card company as well. So, don’t avoid making the payment online or through the mail to the card company because you assume what you paid on the truck will apply. It probably won’t.

Ask lots of questions when the card offer comes up. Don’t become overwhelmed by the shiny new toys and toolbox in the truck. Protect your wallet.