buying on finance negatives

Negatives to Consider when Buying on Finance

Yes, there are many benefits of financing. Whether this be a new car, new clothing, accessories, shoes, or major appliances or furniture for your home, it allows you to pay off these items over an extended period of time. You don’t have to put anything down when financing for the most part either. It will help reduce the overall total owed, but many people choose not to put anything down, and simply pay each week or month through the catalogue or lender they choose to go through. With the many benefits, are also a few drawbacks to shopping via financing.


Many times, people believe that because they have an open line of credit of £5000 they should spend it. Financing often promotes overspending, and this is a very bad habit. If you are compulsive, have had issues with overspending in the past, or have misused credit/financing in the past, this is something to be weary of.

High balance

A high outstanding balance, or overspending on many financed accounts, can negatively impact your score. This is often a trap that people who finance, get caught up in. This means you really have to monitor your spending, pay attention to open accounts, and know your limits if you are going to finance items.

Late payments

Sometimes you simply can’t keep up with payments. This is a problem many people have. Not only do late penalty fees pile up, but your minimum payments will go through the roof if you are habitually late on payments. Add in the fact it can greatly diminish your credit score, and this is really a negative to choosing to finance purchases/items, rather than paying for them with cash or debit card instead.

Reduce credit score

All of the above can result in a lower credit score. But, even if you aren’t overspending, but have dozens of open accounts, this can negatively impact your credit score as well. Credit agencies, lenders, and other companies will view you as a ‘dangerous’ or habitual over-spender. And, if you aren’t careful, you’ll get caught up in the trap of trying to pay one account with other accounts, which credit companies don’t allow.

Faulty/irresponsible spending

Sometimes you’ll find just because you have the available funds you’ll spend them. This ties back to the overspending, but it is also an increased risk for people to buy things they don’t need, or just start to impulsively shop for items. You don’t want to get caught up in this trap. So, rather than finance everything, make sure you understand the risks, to avoid this happening to you.

If you are not a very responsible shopper, and don’t have a high credit score, financing might not be the route for you to go when shopping. It is beneficial, and if you are responsible, can actually benefit your spending habits and your credit score. But, there are also dangers to choosing to finance everything you buy. So, before going down this route, consider a few of these potential drawbacks, to avoid getting caught up in the spending-circle trap.