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In The News: iPad Could Cost More Than You Think

 
Credit cards, Managing debt, Bankruptcy | 3 Comments | 678 Views | 0
By: Keith Morris , January 27 2010
 

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It's no secret among my friends--I'm a huge Apple fanboy. I'm in San Francisco this week, and it's thrilling to be one block away from where Apple just announced the iPad. I walked in front of half a dozen press cameras on the way to work, trying my best not to look like a giddy fool. It's possible that I could have strolled right past Steve Jobs without knowing it!

If you're planning to camp out in front of an Apple store in March to be one of the first to own an iPad, then you should know that it might cost you more than the $499 that Apple says it's going to cost. Here's why:

Suppose you're a little short on cash. But you have to have the iPad! So, you've decided to charge it to your credit card. Let's say that credit card already carries a $5,000 balance, with an APR of 13%, and you make the minimum payment of $110 per month.

Enter the cost of credit. For the luxury of being in debt, your iPad over time is going to cost you $1,040, more than double the listed price!

Take a look at our cost of credit tool for a visual demo of the impact that credit has on the ultimate cost of purchasing. You can plug in your own numbers for a more tailored outcome.

How much would cost of credit add to your iPad purchase?

 

 
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COMMENTS (3)
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Keith,

Isn’t that iPad sweet? You make an excellent point about using credit to pay for something when you don’t have the cash to pay for it and the real cost. The four worst enemies to our accumulating money are Taxes, Inflation, Debt and Ourselves. Self restraint is part of the “Ourselves”. I know that it may be old fashioned, but waiting till you have the money to pay for something will serve you well in the long run and keep you out of debt. Carrying a credit card balance and only paying the minimum payment puts you on a slippery slope to being in debt. Once it starts, it is very hard to get out of.

So, if you are craving that iPad, start putting aside $50/month and by October you’ll have enough to pay cash for it. You’ll also avoid the lines at the Mac store and they will have worked out the bugs (and there will be bugs). They may also come out with one that is equipped with a camera for Skype, etc.!
by   Tom Doyle  on  January 29, 2010 at 02:37PM EST
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I was underwhelmed with it at first. It looks just like a giant iPhone. I hope they plan to do something new with the home screen before they release it. It's awful. :)
But I think having all of that screen real estate is going to open doors for some new and interesting applications.
by  Keith Morris  on  January 29, 2010 at 02:44PM EST
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Keith,

The 'need versus want' outlook comes into play when you are purchasing items and using your credit cards. Credit cards are a convenient way to delay payments, but they should be paid off in full each month. If you already have a balance on the card and miss a payment, then the cost of the item will be inflated. Missing a credit card payment can double you interest rate causing the interest rate to be as high as 29%. Not only has your interest rate gone sky high, but you could be facing a $40 late payment fee. At some point, you could be paying almost as much interest each month as you are on the initial product cost. By the time you get it paid off, the newest updated version is out!!

by   Kimberly Howard  on  February 02, 2010 at 02:44PM EST
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