Bread Financing for mods

[Irish Creig]

Don’t finance or use credit cards for mods if you can’t pay your balance in full every month. Set aside a Jeep budget & save up.

Totally agree! So far I've paid cash for everything with my Jeep including its purchase. I don't like loans and credit cards, you're only putting money in someone else's pocket with the finance charges. Right off the bat I did a lot of mods to my Jeep, I'm loving it but I know it's not where I want it to be. I'm just being patient and sitting tight right now since I had such a large outlay of cash last year where the Jeep is concerned. Nice thing about waiting and saving up the money is you get to really look around at the choices and do research. That way you know with the next mod that it's exactly what you want! Below is my baby

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[BigFeet]

Cry once and be done with it.

Cry once a month for 36 months paying an extra $762.00 over in interest that could have gone to the new tire savings bucket.

I've done both, and can tell you the very short-term is quite satisfying while also quite short.

 

[Apples491]

If you can get a 0% interest financing or credit card, create a plan that pays it off before the interest period runs out, and trust yourself enough to stick to that plan, there's no reason to avoid financing. 0% credit cards and short term financing are banking on you not paying it off in time. Beat them at their own game and you win.

With lead times what they are on a lot of aftermarket parts, I decided to do just this in preparation for my Jeep arriving. I knew what I wanted, how much it cost, how much I could put towards it up front, and how long I would need to pay off the remainder on a 0% interest account.

I decided on using Paypals Credit Card offer which gives me 6 months 0% interest. I have until August but I've planned to pay it off by June to account for any unforeseen expenses that might throw a wrench into my plan.

 

[Adv_aw8s]

I wouldn’t use those. I would advise seeking a 0% credit card. I opened one up on AMEX and received 0% for a year I believe. I ran all my mods through it. Yes I had the money to pay for it all upfront, just nicer to split up the payment over 6-8 months.

Funny enough, shortly after I opened up that card. AMEX is currently running 24 month no fee plan it offer on my Platinum.

I agree with this. This is what we did. My wife and I both opened separate credit cards that gave us 0% for 18 months and gave us both 250 cash back if you spent over a certain amount in 3 months. I had a list of all the first round of mods we were doing so we got 500 bucks of free cash. We had the money to pay for everything but why not use someone else's money for a bit and get 500 free dollars.

 

[Shamwedge]

I appreciate all the input.

Sometimes people put things on cards just because they want to spread the payment out, not necessarily because they can't afford it. Most of the time, yea, it's probably because they can't afford it, but not always. It's also a way of increasing a credit score.

I mainly use Synchrony for these types of purchases because they offer 0% APR if paid in full before the promotional period with no early payment fees. Very easy to work with and customer support has been nice for times I needed them.

I wasn't sure if Bread was like a Synchrony or not and just wanted to get some firsthand knowledge.

 

[BigFeet]

I appreciate all the input.

Sometimes people put things on cards just because they want to spread the payment out, not necessarily because they can't afford it. Most of the time, yea, it's probably because they can't afford it, but not always. It's also a way of increasing a credit score.

I mainly use Synchrony for these types of purchases because they offer 0% APR if paid in full before the promotional period with no early payment fees. Very easy to work with and customer support has been nice for times I needed them.

I wasn't sure if Bread was like a Synchrony or not and just wanted to get some firsthand knowledge.

It is all good.

I believe everyone is protective of all the Jeeper brothers and sisters, and can't help but to pull over and make sure everything is ok.

As long as your recovery gear is up to snuff... you're going to be alright.

Be safe, and have fun.

 

[roaniecowpony]

There was a time, not more than months ago, that I would have said go ahead and use someone else's money for a lot of things. Not so much right now. The economic future is more uncertain now as it ever has been.

 

[Some Random Guy]

I appreciate all the input.

Sometimes people put things on cards just because they want to spread the payment out, not necessarily because they can't afford it. Most of the time, yea, it's probably because they can't afford it, but not always. It's also a way of increasing a credit score.

I mainly use Synchrony for these types of purchases because they offer 0% APR if paid in full before the promotional period with no early payment fees. Very easy to work with and customer support has been nice for times I needed them.

I wasn't sure if Bread was like a Synchrony or not and just wanted to get some firsthand knowledge.

If you do it right, you can be fine.

I think the reason a lot of us bring up the view we did is that there's a difference between being able to "afford" something and having the money for it. Anytime someone is counting on future income is a suggestion that their cashflow is not good. Financing purchases is usually a red flag someone is looking to future income. For a house, good. For a car, can be ok. For anything else, maybe not. Reddit has a good flowchart on growing wealth. I'm about to highjack just because this stuff is important, if not to you, then maybe to someone who stumbles on this later. The full chart shows when to prioritize what types of debt. Here are the highlights:
1) Have $1,000 set aside for emergencies. Back in 2019, 40% of Americans would struggle with an unexpected $400 expense.
2) Maximize employer 401k type matches
3) Increase retirement saving contributions towards 15%
4) Maximize HSA options

When I advise friends, I tell them to not even think about financing something other than a house or car until they're past #2, and I strongly recommend their retirement savings accounts be at or ahead of their peers. Preferably ahead, otherwise they need to meet #3. Finally, the "cost" of that 0% financing is someone's retirement savings in the form of "Opportunity Cost". The younger they are, the more true this is. $10,000 today is roughly $150,000 in 30-35 years. It's boring, but it needs to happen or we just become another ward of the government.

So if anyone is thinking of using a 0% offer and stumbles on this, be sure it's to keep you on track with growing your wealth, not because you only have future income to spend. Again, @Shamwedge , not aimed at you. Just the next person who searches Bread Financing and thinks they can get "free money" to buy things they probably shouldn't. I'm no saint, I'm in my early 30's and have a long history of auto loans.

 

[MyDaughters20JL]

I used them to finance a high-end computer & really didn't have any troubles: the only issue is that the manufacturer was backordered on a part (might have been the graphics card) & when they credited me for the item, I then had to either pay cash or open another loan for the replacement part...that's probably no fault of bread, but it was still a minor glitch.

 

[SH556JL]

There was a time, not more than months ago, that I would have said go ahead and use someone else's money for a lot of things. Not so much right now. The economic future is more uncertain now as it ever has been.

I feel better with (low interest) debt in times of rising inflation as long as I can keep income rolling (hopefully income should also be outpacing inflation).

 

[roaniecowpony]

If you do it right, you can be fine.

I think the reason a lot of us bring up the view we did is that there's a difference between being able to "afford" something and having the money for it. Anytime someone is counting on future income is a suggestion that their cashflow is not good. Financing purchases is usually a red flag someone is looking to future income. For a house, good. For a car, can be ok. For anything else, maybe not. Reddit has a good flowchart on growing wealth. I'm about to highjack just because this stuff is important, if not to you, then maybe to someone who stumbles on this later. The full chart shows when to prioritize what types of debt. Here are the highlights:
1) Have $1,000 set aside for emergencies. Back in 2019, 40% of Americans would struggle with an unexpected $400 expense.
2) Maximize employer 401k type matches
3) Increase retirement saving contributions towards 15%
4) Maximize HSA options

When I advise friends, I tell them to not even think about financing something other than a house or car until they're past #2, and I strongly recommend their retirement savings accounts be at or ahead of their peers. Preferably ahead, otherwise they need to meet #3. Finally, the "cost" of that 0% financing is someone's retirement savings in the form of "Opportunity Cost". The younger they are, the more true this is. $10,000 today is roughly $150,000 in 30-35 years. It's boring, but it needs to happen or we just become another ward of the government.

So if anyone is thinking of using a 0% offer and stumbles on this, be sure it's to keep you on track with growing your wealth, not because you only have future income to spend. Again, @Shamwedge , not aimed at you. Just the next person who searches Bread Financing and thinks they can get "free money" to buy things they probably shouldn't. I'm no saint, I'm in my early 30's and have a long history of auto loans.

SRG above is wiser than his years.

I played like no tomorrow when I was in my 20s and even into my 30s. I was bad. Then, I buckled down and started saving. By 50 I was putting 20% of my six-figure salary in my 401 and kept it that way until I retired 2 years ago at 63.

We were lucky in that my wife also did similarly, we had no children and her income always exceeded mine. We could have driven German cars like our neighbors, but we both drove domestic stuff and kept them fairly long, always beyond the loan terms, probably because that was our upbringing.

But we spent a lot too. When we worked our weekly dinner bill was very high, it was almost as high was our house payment. But we worked long hours and our budget allowed it. I don't know if that means we bought too low on the house or cars. Times were good, the stock market was great. It all worked out for us. Those great times of the stock market are looking like cloudy skies are here. Hunker down. If you have a good number of years before retirement, now is a time to invest, when the market is down or gets down lower. Then sit tight.

But the reality is, it's all a balancing game. So, do you really want to buy $20k in mods to your jeep, or put that away for a while?

 

[Jim1964]

Lots of good stuff has been said. I’ll add pay your future self FIRST and invest that money. Borrowing keeps you poor, investing brings freedom.

Zero interest loans have their place, but there’s usually a hidden cost buried in the price paid for the item. Just look at what incentives are frequently offered on cars; low rate financing OR cash back. It’s not really zero % when you’re paying a higher price.

Insofar as credit cards, I use them all the time. Don’t care about the interest rate, I care about the cash back. Anywhere from 2-5% on most things I buy depending on the category. I just got back $250 today. Paid in full every month so the interest rate is irrelevant.

 

[BigFeet]

... Here are the highlights:

1) Have $1,000 set aside for emergencies. Back in 2019, 40% of Americans would struggle with an unexpected $400 expense.

A good rule of thumb would be to have a savings that could last six months if you lost your job/primary income today.

2) Maximize employer 401k type matches

This is "FREE" money someone else is contributing towards your retirement account!

3) Increase retirement saving contributions towards 15%

Maximum allowable contributions, if possible. Compounding interest is a real thing, and can result in an impressive balance at retirement.

4) Maximize HSA options

Healthcare costs will crush a budget. Help alleviate the hurt by preparing ahead.

...

Bolded - Just wanted to expand on these points.

 

[Some Random Guy]

Bolded - Just wanted to expand on these points.

I agree with the 6 month thing, but it falls further back in the flowchart. The reason I’m aware of is that it’s intimidating for people just getting ahold of their finances. $1,000 is more approachable.
I was told that financial advising is trying to pivot away from numbers and statistics and account more for actual results via human behavior (aka results). That’s why I tried to hit the highlights. Each is achievable with a plan, but nothing seems like a huge jump in my experience.

 

[BigFeet]

I agree with the 6 month thing, but it falls further back in the flowchart. The reason I’m aware of is that it’s intimidating for people just getting ahold of their finances. $1,000 is more approachable.
I was told that financial advising is trying to pivot away from numbers and statistics and account more for actual results via human behavior (aka results). That’s why I tried to hit the highlights. Each is achievable with a plan, but nothing seems like a huge jump in my experience.

Completely agree. One step at a time, as they say. All achievable goals start with a plan, and first step.

The "pivot" is not a turn from numbers and statistics, but more of a new way of articulating ideas to clients. Best interest of client regulations will lead advisers to looking at inflation, market volatility, life longevity, healthcare risk, withdrawal risk, liquidity needs, risk tolerance, etcetera before any options are presented.

The only risk anyone has control over is withdrawal risk. Budget wisely because years of accumulated provisions can become lacking while expenses increase. Especially, once retired, and your ability to generate income (get a job) is slim, or finite.

The numbers and statistics are part of the very core of a financial plan whether those be; Social Security calculations, monte carlo or deterministic logic being used/sequence of returns, cost of living adjustments, inflation percentage which can vary depending on type of expense, morality, expected living expenses, taxes involved, etcetera. A lot of these are hypothetical calculations or statistical information from government /and private institutions. These variables are constantly changing too.

The best advice I could give anyone is to talk to a true licensed financial adviser.

My 17 year forte is a career most would find boring and uneventful.

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