Rent-to-own and payday loans aren't worth it

Friday, Aug 8, 2008

If you're debating renting furniture, be aware those "low, easy payments" are a rip-off. "It's like a $7 billion industry," says Reader's Digest Features Editor Donna Bank. The interest rates are typically 75 percent to 350 percent.

For example, Banks says you can rent a 37-inch LG flat screen TV at Rent-A-Center for $36 a week. After 142 weeks, you own the TV, but you've just spent $5,100 for a $1,300 TV. She says that's an interest rate of 142 percent.

Payday loans are another rip-off you'll want to avoid."It's a $4 billion business," she says. Banks says the interest rates on those loans "range from 391 percent to 500 percent."

Source: http://www.wtop.com/