Is it better to buy a computer on my credit card, or on credit from the computer store?
Using your credit card: Applying for a store credit card: In general it is far better to not buy bigger items like a computer until you can pay cash, or pay for it on credit card (to get reward points) and then pay off the card the next month so you don't pay interest. Since you have a credit card, I recommend you use it for the purchase. It gets you two things at the very least: Gets the purchases reported as credit utilization. If you handle that correctly, you can improve your score Most card vendors give free extended warranty and return policies that a retailer or manufacturer does not without extra fees. I buy all my electronics using my cards and not only does that optimize my scores but I have been able to enjoy painless/better RMAs for defective products just because my AmEx card would have refunded me the money anyways and the retailers knew it (AmEx would have recovered it from them in the end so it was in their interest to resolve the matter within 30 days) As far as the money goes, it all comes down to the terms.  What is going to cost you the least?  Look for hidden fees and costs with the store credit.  You will need to read the fine print of the credit agreement some automatically sign you up for a service that will cost you extra money every month.   Compare what the costs are going to be over the term you will pay it off.  A good calculator to help you figure this out is http://www.amortization-calc.com/ It is designed with larger loans but works for smaller loans too.   Realize that you will have to add fees and finance charges into the total loan amount to get a good comparison. ** Unless you NEED a computer you should wait until you can afford to pay for it.  Charging these types of expenses tends to lead down to a pit of debt that is hard to get out of.  Wanting a computer really bad is not the same as a need. "The downside of the store card is that the ""deal"" for using the card is typically 6-12 months of ""no payments"" or ""no interest"". In reality, the ""deal"" is deferred payments/interest. The problem is, if you miss any payment, or fail to pay the computer off in full, you'll have to pay for the accrued interest -- at a rate typically 25% or higher. That means if you buy your computer for $1,000, and pay $999 at the end of 12 months, you may have to pay $250 in accrued interest. These cards can be great deals, just be really careful!" In my experience dealing with credit cards and store cards, you may find that the store card is much more flexible than the credit card in terms of the enforcement of the card agreement.  For instance, I've missed payments on credit cards and only been 1 day late and saw a rate increase, but on a store card when the same thing happened, it was like they didn't even notice.  Granted, this was a 100% store card with no VISA/MC logo on it, and it was through their bank. This may not be true of all store cards and your experience may differ, but I felt like the store card was more of a tool for acquiring the merchandise and helping the store make a sale than it was for some big bank to make money off of my interest. With credit cards, you are the product, and the bank makes money purely from interest. The store, on the other hand, makes money from selling the product, and credit helps increase sales. My suggestion is to avoid credit altogether as all debt is risk, but if you must use credit, you may have a better experience with the store card. Of course, don't forget to consider the interest rates, payment plan, and other fees that may apply as they may affect your decision in terms of which to go with. you should pay cash. always pay cash or debit card. never use credits unless absolutely required. if you so poor that you need credit card you must reduce your costs! don't buy anything except food, start making money, then you will buy everything! and you should buy cheapest food now
There are different ways of credit card purchase authorizations. if some choose less secure method it's their problem. Merchants are charged back if a stolen card is used. Debit is them taking the money, in your case electronically.  Credit is somebody vouching for you and saying you will pay later. They are alternate ways to pay for a product.  As a merchant, if you take a credit card you are agreeing that a the issuer of the credit card is going to pay you right away.  The issuer of the credit will worry about collecting the money from me.   There are a ton of details with regards to why you would use one over another, where the costs in each method are and who pays what for each.  The main different is the source of the funds. "My knee-jerk reaction was ""no, they are not worth it"", but I took a little time to look up what some of the trusted names in consumer electronics reviews had to say about extended warranties/service contracts. A cnet writer said that your decision should consider the price of the service contract relative to the price of the item you're buying, as well as the amount of hassle you're willing to endure, should something go wrong. Consumer Reports believes that the warranties that come with your products are almost always enough, and they say that electronics and appliances are so well-built nowadays, the likelihood of you needing extra service before you upgrade are slim-to-none. And the folks over at epinions.com offer the same maybe-yes-maybe-no advice as the cnet guys: depends on your appetite for risk and the options available to you. So I would suggest that the answer be ""no"" most of the time, but consider it anyway." "I was just reading Consumer Reports' December 2009 issue.  The issue's focus is electronics, and there was a small section on extended warranties in the ""Best electronics"" article.  Here's what they said: Extended warranties still aren't   worth buying Seven in 10   respondents to our survey on buying   major electronics reported they were   pitched an extended warrranty.    However hard they're sold, extended   warranties are generally bad   investments.  Most electronics   products won't need a repair,   especially if you choose brands that   have fared better than others in the   reliability ratings we include in this   section.  In the unlikely event they   break, other Consumer Reports survey   data has shown,  the average repair   bill is often comparable with the cost   of a warranty. However, buying   a plan that includes accidental damage   might be worth considering for a   laptop or netbook that you'll use a   lot on the go.  And buying a computer   warranty that extends tech support,   too, might make sense if you or a gift   recipient could use a lot of   hand-holding. [...] Paying   with your credit card might   automatically double the   manufacturers' warranty and offer   other benefits at no extra cost   [...] Seven in 10   respondents to our survey on buying   major electronics reported they were   pitched an extended warrranty.    However hard they're sold, extended   warranties are generally bad   investments.  Most electronics   products won't need a repair,   especially if you choose brands that   have fared better than others in the   reliability ratings we include in this   section.  In the unlikely event they   break, other Consumer Reports survey   data has shown,  the average repair   bill is often comparable with the cost   of a warranty. However, buying   a plan that includes accidental damage   might be worth considering for a   laptop or netbook that you'll use a   lot on the go.  And buying a computer   warranty that extends tech support,   too, might make sense if you or a gift   recipient could use a lot of   hand-holding. [...] Paying   with your credit card might   automatically double the   manufacturers' warranty and offer   other benefits at no extra cost   [...] BTW, I like Consumer Reports and I am a long-time subscriber.  Check them out if you haven't before." I'm aware of how credit cards work, in fact I basically said the same thing in my original comment.  &gt;because you get this nifty smartphone pluggable credit card swiper, you end up paying more than the alternate options. Granted I am in no way knowledgeable of the alternates (as in, mobile credit card machines?), but I assume they aren't as easy to set up.  -Square costs more -Other options aren't easy  I guess my inquiry should be more targeted towards how regular credit card transactions are processed in the mobile space.  Honestly I have no idea, and I assume that's why Square is popular.  I still see some places at the farmers market with the carbon copy slider thing, but then I also see some rocking what seems to be a regular credit card swiping gizmo.  Making 0% on a nonsale vs 90% on a square sale obviously makes sense, but I'm wondering if there's a less convenient, although more profitable sale (regular 97% Visa/MC) that people simply aren't aware of. "Here's another rational reason: Discount. This typically works only in smaller stores, where you're talking directly to the owners, but it is sometimes possible to negotiate a few percent off the price when paying by check, since otherwise they'd have to give a few percent to the credit card company. (Occasionally the sales reps at larger stores have the authority to cut this deal, but it's far less common.) Not worth worrying about on small items, but if you're making a large purchase (a bedroom suite, for example) it can pay for lunch. And sometimes the store's willing to give you more discount than that, simply because with checks they don't have to worry about chargebacks or some of the other weirdnesses that can occur in credit card processing. Another reason: Nobody's very likely to steal you check number and try to write themselves a second check or otherwise use it without authorization. It's just too easy to steal credit card info these days to make printing checks worth the effort. But, in the end, the real answer is that there's no rational reason not to use checks. So it takes you a few seconds more to complete the transaction. What were you going to do with those seconds that makes them valuable? Especially if they're seconds that the store is spending bagging your purchase, so there's no lost time... and the effort really isn't all that different from signing the credit card authorization. Quoting Dean Inge: ""There are two kinds of fool. One says 'this is old, and therefore good.' The other says 'this is new, and therefore better.'""" A few years ago, I had the rare opportunity to take advantage of a credit card offer. Specifically, a 10% cash back deal on purchases at drug stores or supermarkets. The offer was limited to 90 days, so during that time, I bought 100 cash gift cards at my local CVS.  Over the next year to use them all, when they dropped to a balance under $5 or so, I signed in to my cable TV account and charged the remaining balance there. No bothering a supermarket clerk, or store owner. I've had positive experiences and negative ones. One key is to be sure you have followed ALL of the instructions. Once I forgot a small piece of information and lost out on $40. I was not happy. A few weeks ago I got a rebate for $50 from Staples, and it couldn't have been simpler. Stick with big companies and make sure you do everything on time. Companies use rebates because they know some people will forget, mess up, or not use the rebate. They make a ton of money off of unused rebates. One more thing to favor the card. Extended warranty, or damage coverage. An iPad, if dropped on a hard surface, stands a good chance of breaking. Apple isn't going to cover that, as it's not a defect. Many credit cards offer free coverage for breakage of this type as well as doubling the warranty up to a year. This second year of coverage is worth about 10% of the item cost.  To be clear, I'm talking about running the expense through a card and paying in full, some call it credit no different than those who carry a balance month to month and pay 18% interest. I believe if I have the money to spend on an item, and use the card to get that coverage along with the benefits others posted, it's a convenience, nothing more. Some people who use certain budgeting methods like to set up a payment each week so the bill comes in close to zero. Whatever works. I work in the retail software industry, and can confirm this is a major problem right now.  There are several very popular point of sale packages that hackers have written RAM scrapers for.  Yes, there is (a lot) of credit card fraud traced back to these hacks. "These are two different ways of processing payments. They go through different systems many times, and are treated differently by the banks, credit card issuers and the stores. Merchants pay different fees on transactions paid by debit cards and by credit cards. Debit transactions require PIN, and are deducted from your bank account directly. In order to achieve that, the transaction has to reach the bank in real time, otherwise it will be declined. This means, that the merchant has to have a line of communications open to the relevant processor, that in turn has to be able to connect to the bank and get the authorization - all that while on-line. The bank verifies the PIN, authorizes the transaction, and deducts the amount from your account, while you're still at the counter. Many times these transactions cannot be reversed, and the fraud protections and warranties are different from credit transactions. Credit transactions don't have to go to your card issuer at all. The merchant can accept credit payment without calling anyone, and without getting prior authorizations. Even if the merchant sends the transaction for authorization with its processor, if the processor cannot reach the issuing bank - they can still approve the transaction under certain conditions. This is, however, never true with debit cards (even if used as ""credit""). They're not deducted from your bank account, but accumulated on your credit card account. They're posted there when the actual transaction reaches the card issuer, which may be many days (and even many months) after the transaction took place. Credit transactions can be reversed (in some cases very easily), and enjoy from a higher level of fraud protection. In some countries (and most, if not all, of the EU) fraudulent credit transactions are never the consumer's problem, always the bank's. Not so with debit transactions. Banks may be encouraging you to use debit for several reasons: Merchants will probably prefer credit because: Consumers will probably be better off with credit because:" Typically, businesses always charge their 'home' currency, so if the shop is in Canada, you will pay Canadian Dollars. Normally you don't have any choices either. Your credit card company will convert it to your currency, using the current international currency exchange rate (pretty good), plus a potential fee between 0 and 5% - depending on your credit card (not so good). If it is a significant amount, or you plan to do that more than once, and if you have multiple credit cards, check first to see which one has the lowest international fee; 0% is not uncommon, but neither is 3 or 4%. If it's a 10$ thingy, it's probably not worth the time; but 4% of 1000 is already 40$... As of right now, the currency exchange rate is 1.33, so you would pay ~75 USD; plus the potential fee, 0$ - 4$. Understand that this exchange rate is floating continuously; it probably won't change much, but it will change. Possibly not relevant to the original asker, but in the UK another advantage of using a credit card is that when making a purchase over £100 and paying by credit card you get additional protection on the purchase which you wouldn't get when paying by debit card. E.g. if you buy something costing £100 and the company goes bust before it's delivered, you can claim the money back from the credit card company.  Whereas if you paid by debit card, you would potentially lose out. This protection is a legal requirement under Section 75 of the Consumer Credit Act 1974. "Yeh sure! You will drive your car, hope the store will have what you look for, in the right size and color, and pay more. Rather than buy on-line.  What's next? You will say ""it's the fault of the consumer"" that they chose to drive cars instead of horses with buggies?  Brick and mortar retail can not be the same if you can shop and have huge selection on-line from anywhere were you live." "Just to add about using debit card as ""credit"" vs ""debit"" way: In addition to the difference of having to enter the PIN when using ""debit"" mode (vs having to sign in ""credit"" mode), for stores that offer cash back (i.e. get cash out of your account at the same time as paying), you can only get cash back when using ""debit"" mode."