Buying PCs on a budget

Budget

Can you get you get free loan to buy a computer?

Why it is important to pay by creditcard

When we talk about budget we're don't mean the amount you have in cash, burning a hole in your pocket. Often you may be planning on borrowing to buy your computer. Or buying it on an installment scheme. For the purpose of our exercise we'd like you to work out a figure that you can afford, the maximum that you'd be willing to pay for a computer, irrespective of how you are going to pay.

Let's then work out the minimum specification you need. Within your budget you may be able to get a lot more than the minimum specification required for the job, but it's a logical place to start. Please go back to basics or what computer do I need, if you need help with deciding the specifications.

Most computer salesmen will try to sell you the highest spec system you can afford. Don't be tempted. Why not just settle for the minimum specification if that's within the budget? There is logic in not using a sledgehammer to crack open a nut. If the minimum spec does the job, go for it. There is one exception: Go for the lowest spec if you are sure you aren't going to need an upgrade soon. You'll find that there is a financial advantage to buying a computer with 128 MB of RAM than buying one with 64 MB and upgrading it to 128 later. (There are technical advantages too - 1x128MB is better than 2x64, especially when the 2x64 are two different makes).

If there's a possibility that you will want an upgrade soon then let's add that upgrade now. It'll keep total costs down. What particular upgrades you will add to your minimum spec will be dependent on what you are using the computer for. Common upgrades are more RAM, larger hard disks, the addition of a modem/printer/scanner, and commercial software.

You have cash ready?

Assuming you have the money readily available and don't need finance, you can save a lot in interest. You may see some "interest free" offers. "Interest free" doesn't exist.

Some firms will prefer you pay in cash. Others may prefer a debit card. The best way, of course, is to pay by creditcard. This may cost a wee bit more in terms of a credit card surcharge but the protection you get with most cards is worth the extra pennies.

Also, if you do choose to pay in cash and forego the extra protection, make sure you still get a proper VAT receipt. Buying without VAT is not only illegal but has several other risks. Read about them here.

Interest Free credit DOES NOT exist

Just like individuals, all businesses pay for credit. When a business offers you an "interest free" deal it has probably built the cost of financing (the interest) into the price of the goods. Sounds cynical? It's true. It's a marketing trick.

So why don't you approach that firm offering "interest free" credit and ask them to knock something off the price because you can afford to pay now? It's a good idea but It won't work. Try it. Legally, when they make such an offer they can't then differentiate between customers who are paying up-front and those taking credit. If you do get a business that says it'll knock something off the "interest free" price for a full payment you can report them to your local trading standards. They'll probably tell you that there is no charge being made for the credit and they therefore can't give you a discount for not taking credit. Yeah!

Our advice: If you have funds available avoid firms/computers offered on "interest free" terms. You could be paying a built in charge for a facility that you don't need. Look around hard enough - you'll find an equivalent product offered much cheaper, without the "free" credit.

How can I get free finance/credit on a computer?

There are several good ways to get pretty cheap finance to buy a computer.

Try your bank - they may be willing to lend you the money at a far lower interest rate than than commercial firms/hire purchase agreements etc.
Even better - shop around for the credit card deals. Some cards have introductory offers of around 3% APR for the first six months. Buy on the card, pay less than a quarter of the interest you would be charged in other places, and then close the card account when you are done with the repayments. This has a further advantage in that you are paying interest by the day i.e. it is charged on a daily balance method. If you get a windfall in the middle of the month, pay it into your card account, and the interest you pay for that month is lower.
Talk to your employers. Will they benefit in any way if you have improved IT skills? They may be willing to finance, or even pay, the cost of a computer.
Government schemes: Talk to your local Job Centre. There may be schemes designed to get unemployed back to work. These schemes may be able to finance a PC as part of a training program designed to get you back to work.
What about a private loan? It's a small amount, and for a good cause. Have you got a doting grandparent?
Enter some competitions for a free computer. Keep your eyes open - there are numerous such competitions, especially in places like the PC magazines.

Why it is important that you pay by credit card

The protection you get when you pay with a card is much higher than when you pay by any other means. In addition to your statutory rights you also get the protection of the credit card company who will refund you under most circumstances if there is a problem. Some firms charge a small premium if you wish to pay by credit card. It varies between 1-3% of the price. Pay it. In the long run you'll be glad you did.

But you've got the cash ready? Well, no credit card company will stop you from paying cash into your account and then using the extra limit on the card to make the purchase.