Beware the game funding credit trap

by Kyle Orland { Apr 9th 2007 at 10:25PM }

As game journalists, we here at Joystiq get a lot of press releases. As Americans over the age of 18, we get a lot of credit card offers disguised as once-in-a-lifetime deals. Rarely do we get both at the same time.

Enter PeachDirect, a direct marketer that today issued a press release pimping out the PS3 for the relatively affordable price of $20 per month. "This is the machine that everyone wants, and for such a low monthly price, it has never been so affordable," says PeachDirect Executive VP Gary Bale.

So affordable? Not really. First of all, PeachDirect inflates the price of the 60 GB model to $649, and that's before the $49 shipping charge. So, already, you're $99 in the hole compared to going to your local game shop. A small price to pay for such a flexible payment structure, right? Not really. That generous $20/month plan comes with 22.98 percent APR strings attached, meaning it would take 55 months and over $466 in interest to pay off that PS3 at the minimum monthly rate.

We don't mean to pick on the PS3 here -- PeachDirect also offers the Xbox 360 and PSP at similarly "affordable" rates. The point is, no game system is worth going into debt over. Best to save up that $20 a month and endure the wait with a clean conscience and credit rating.

Tags: baloonning payments, BaloonningPayments, crdit card, CrditCard, credit, interet, PeachDirect, scam, trap

Reader Comments (Page 1 of 1)

EihBeir @ Apr 9th 2007 10:36PM

This is not so much an article about the PS3 being expensive...everyone already knows that...it's about reading the fine print, 'cause creditors are money whores.

T @ Apr 9th 2007 10:53PM

If they wanted to actually sucker somebody into taking this "deal" they'd be wise to use a system that you can't readily walk into a store and purchase.

360, PS3, PSP? Why spend an extra grand or whatever it is when (as you said) you could just go in and by the thing at the store. And heck, using a Credit Card and making the monthly payments would still add up to less then they're offer.

Ritz @ Apr 9th 2007 10:54PM

Hrm, there are few luxury items ever worth getting into debt for. You'll thank yourself later if you just save the money and withstand being without for a little while longer.

Pete @ Apr 9th 2007 11:09PM

Peachtree is a pretty sketchy company. They offer easy credit, target to those who may have little or bad credit. They charge a huge interest rate, which is expected (bad credit = high rates). But this company touts high quality at affordable prices. Have you seen a Peachtree magazine? For only $799 you can get a Celeron Laptop that looks like 2001.

Sure it's $20 a month, but people with little or no credit probably cannot afford a six year old laptop for over $1000 total cost. Just don't buy from them. If you have bad credit, save your money and pay in cash. (use that $49 shipping charge towards a used ps3 game)

Demaar @ May 30th 2008 3:11PM

Not to mention if you save up you get the benefit of price drops and revised/more reliable hardware.

You should never ever put a console on a credit card, or pay with one with a loan. Or any technology for that matter.

Lewis @ Apr 9th 2007 11:32PM

peach direct = AWFUL

i order 2 zunes and got it a month and a half later, they said 2 weeks!

NEVER AGAIN!

Lewis @ Apr 9th 2007 11:34PM

just never order from peach direct, customer service is cheap and u will never get what u order, if u ever do it wont work or it wont the what u ordered at all

StevO @ Apr 9th 2007 11:36PM

@4. Pete

Don't you mean PeachDirect, the company in the article? I thought "Peachtree" was Quicken's rival in accounting software..

driven2sin @ Apr 9th 2007 11:43PM

if you have bad credit you probably cant afford much but also don't care about your credit.. so take the deal and don't pay anything. then sell the PS3 on Ebay and turn it into a free Wii & DS !!!eleven!!11!

John Doe @ Apr 10th 2007 12:10AM

*rolls Eyes*

You'd have to really be a moron to fall for this. Or a Sony fanboi who can't afford a PS3. I'll leave it up to the reader to determine if there really is a difference between the two though.

idioteraser @ Apr 10th 2007 1:01AM

Nice to see the ghetto tax being applied to videogame consoles.

For those that don't know the ghetto tax is like it sounds. Living in the ghetto is more expensive then living in the suburbs due to not being able to get a bank account, not having any grocery stores nearby so you have to go to gas stations that charge twice as much or more then a grocery store.

People go to credit lenders, or rent to own places that charge incredibly high interest for items not worth the price. Ever see those stores that charge 99 dollars per month for a year for a computer? Said computer at retail at most costs 500 dollars but guess how much you would pay to rent it for 12 months? Answer is 1118 dollars.

You pay 1000 dollars for a dining room table that would cost 300 dollars in most furniture stores.

Pete @ Apr 10th 2007 1:34AM

@Stev0

ha ha, yeah. Peachdirect, not the financial software Peachtree. Thanks.

bgdc @ Apr 10th 2007 1:44AM

If idiots do it, so be it.

Brainswarm @ Apr 10th 2007 1:50AM

I believe there are only two things you should go into debt for: a house and a decent car. Neither should be more expensive than you can reasonably afford. I have very seldom carried a balance on my credit card, and even that was only for a couple of months to buy a gaming computer. Anyone who goes into this kind of debt with these kind of terms for a gaming console is really asking to be taken advantage of.

The bad thing here is that the kind of person who is most likely to find this kind of "deal" attractive probably also has a few maxed-out credit cards in his wallet. Adding one more unsecured loan on top of that for a luxury item like a gaming console really isn't what he needs.

Iredell @ Apr 10th 2007 2:21AM

And look at the prices of individual games. For example, PS3 games are $69. It looks like many games are about $9 more than the MSRP.

martin @ Apr 10th 2007 4:33AM

Harvey Norman in Australia. No deposit, No repayments, No interest for 20 months. Makes a PS3 very attainable. Just make sure you pay it off before the end of the 20 months otherwise you pay 27.5% interest.

Do it.

DonkeyKong @ Apr 10th 2007 7:44AM

Living on credit is NEVER a good idea, its hard to get out of and you will never get a morgage if you are already in-dept. Even if it is "just" $1000

HardwareGuy @ Apr 10th 2007 8:04AM

I totally agree with everyone that this is a horrible idea, basically BlueHippo for game consoles. But it is incorrect that this would hurt your credit rating.

As long as you make your payments on time this could not hurt your credit rating, and would probably help it.

chris @ Apr 10th 2007 8:27AM

@HardwareGuy: Agreed. If you save up that $20/month and pay for the console in cash, you'll have 0 credit rating as far as that purchase goes. Companies like this are predators, but they *can* help people re-gain credit or get out of a bad credit situation because they lend to just about everybody.

Saneless @ Apr 10th 2007 9:52AM

Wow, what a deal. With interest rates so good like that, I wonder if they want to redo my mortgage for a low rate of probably 12.99

Bluebreaker @ Apr 10th 2007 10:58AM

Luxury item= you can live without it.
Not worth wrecking your precious credit and good name over.

I just quietly set aside a little money each month and it goes towards a new system. The games and system availablity will catch up when I have the sufficent funds.

Todd @ Apr 10th 2007 11:12AM

Credit Card Companies = Scum

Oz @ Apr 10th 2007 1:30PM

Credit cards aren't free money???

bgdc @ Apr 10th 2007 12:07PM

Donkeykong, not sure where you get your info but $1k on credit won't even make a blip on most mortgage loans. I own several homes, have a few cars, etc and getting a new home loan is as simple as a few clicks/phone calls.

What people don't understand about credit is rather shocking. Read up a bit - once you establish some credit (pay off cars consistently, pay off an auto-loan), getting a home loan is easy.

bgdc @ Apr 10th 2007 12:09PM

Blue - this deal won't wreck anyone's credit. If anything if some idiot jumps on the deal and follows it through his credit report will look far, far better. He took out a line and carried through - that's what creditors WANT to see. They want to see a history of success. It's when you default that your credit goes in the crapper. Credit is one of the few things that's directly related to cause and effect - pay your bills, your credit goes up - act like an idiot, your credit goes down as nobody wants to take a chance on you.

charlie @ Apr 10th 2007 1:23PM

Geez I want to get in this fuckin business.

Seriously though, it would seem like if someone figured out how to lend to poor people for less interest (would probably have to come up with some revolutionary way of ensuring payment), they would make a lot of money and be great for the community. 23% interest sucks. I would think there should be a way for everyone to be able to get some credit at 13% or lower.