Hire Purchase.
If you do not
have enough money to buy an item, you might buy on credit. There are different ways of doing this such as hire
purchase, credit cards, store cards, bank overdrafts and personal loans.
Make sure you know the true cost of buying on credit.
This section
deals with hire purchase.
Hire purchase
allows you to buy items straight away but you pay for them in instalments
(usually monthly).
You probably
will not own the items until all the instalments have been paid. If you stop
paying the instalments, the items could be taken back.
EXAMPLE:
Music Centre £650
(or a 20%
deposit plus 24
monthly payments of £27.50
each month)
If you buy the music centre on credit:
deposit = 20% of £650 =
£130
24 monthly
payments =
24 ×
£27.50
= £660
total credit price =
£130
+ £660 = £790
How much extra does the hire
purchase cost you?
GET WISE
If shops and
other places offer interest-free periods, find out exactly what you have to pay
in the end. It may cost you a lot of extra money.
Test lesson 9
Other lessons:
Lesson 1. Wages
Lesson 2. Wages-overtime
Lesson 3. Pricing your holiday
Lesson 4. Money for your holiday
Lesson 5. Mobile phones
Lesson 6. Bank accounns
Lesson 7. VAT - Value Added Tax
Lesson 8. Electricity, gas and water
Lesson 10. Credit - 2
Lesson 11. Credit - 3
Lesson 12. Which is better value?
Lesson 13. Car insurance
Lesson 14. Income tax
Lesson 15. Buying a house
Lesson 16. Council fax
Lesson 17. Old age pension
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