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Buying A Computer With Poor Credit

Financing companies offer low-quality alternatives at higher prices

The price of everything seems to be going up these days, but there's at least one exception. Computers are getting cheaper. You can get a more powerful computer for less money this year than you could last year, which is just the continuation of a longtime trend.

You might not know that, though, if you relied simply on radio and TV commercials that offer to finance your computer purchase, "even if you have bad credit." The computers in those ads can cost $1,000 and up.

Are they good deals? You be the judge.

A relative newcomer to the computer financing business is Springfield, Virginia-based Tronix Country LLC. It's Web site offers a "Premium Business Desktop System" for $1,320, plus shipping and handling. There's also a $99 fee to establish an account, making the price $1,419.

Let's compare that with what you get with Dell Computer's entry-level home computer, the Inspiron 530, at $519 - $900 less.

The Tronix Country computer comes with an AMD 3400+ processor. The Dell has an Intel Pentium dual-core processor E2180.

The Tronix Country computer comes with a 17 inch CRT Monitor, the old fashioned kind that takes up enormous desk space and has been mostly replaced by flat screens. The Dell comes with a 17 inch widescreen flat panel monitor.

The Tronix Country computer comes with just 512 MB of RAM, a minimal amount by today's standards. Compare that to the Dell, with 2GB Dual Channel DDR2 SDRAM at 800MHz- 2DIMMs.

The Tronix Country computer has an 80 GB hard drive and 48x RW CD drive. The Dell offers a 250 GB hard drive and a 16x DVD RW drive.

Both systems come with a keyboard, a mouse, speakers, and the Microsoft operating system. The Tronix Country computer comes with an unspecified "business productivity software package."

Judging from the two online descriptions, the Dell PC would appear to be significantly more computer and costs $900 less. So why would anyone buy a computer from Tronix Country?

Perhaps because Tronix Country will finance the computer in a layaway program while the consumer makes payments, just like the previous companies that employed this business model Blue Hippo and Financing Alternatives.

"We realize that in today's world, it can be hard to purchase the kinds of products you want without financing, especially if you've had past credit problems," Tronix Country says on its Web site. "That's why we offer an innovative program that looks at our customers' situation today moving forward."

And the company acknowledges that its computer are, in fact, more expensive than the ones you could buy at most retailers. It says banks and other lenders will often not offer financing to someone with a bad credit history, so it charges more to counter the extra risk.

"Tronix Country is willing to take that chance, but it is reflected in our higher prices," the company says on its Web site. "This is no different than how an insurance company sets its rates for policy premiums."

Is being able to finance the computer worth an extra $900 to you? Consider this. You don't get your computer right away. You make a down payment and series of weekly or bi-weekly payments before the computer is shipped. Tronix Country's Web site states "after you receive confirmation for delivery of your merchandise and we have received your completed shipping instructions, please allow three to six weeks for the delivery of your purchase."

At the low cost of today's computers, in some cases you could have paid for a PC from Dell or other big box retailer before your computer arrives. And of course, you have to keep on paying until you've paid $1,419, plus shipping and handling.

There is a simple alternative. Set aside $30 to $50 a week what layaway companies typically charge until you have accumulated around $500. So what if it takes a couple of months to save up the money? Once you have the money you can go shopping and select the computer you want, and take it home with you that day. Best of all, you don't have to keep making payments.

Don't think you can set aside that much money each week? Well, maybe you should think twice about financing a computer.

At the very least, go to Wal-Mart or Best Buy and price basic desktop computers to see what they actually cost before signing up for a computer layaway program. This is advice that Tronix Country itself offers on its Web site:

"While we realize our prices are often higher than some other retailers, they tend to be lower than a rent-to-own option. For people who have sufficient cash or can obtain financing from other means in order to make a purchase outright, our program is most likely not for you. If you need your merchandise immediately, we suggest you investigate other alternatives."

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