Snap-On Credit Debate (school me on why not)

BOONEY7750 · Feb 12, 2013

I am supposed to take delivery of a black 1022 tomorrow. I have a little savings, and pay all my bills on time monthly. My job is steady. I screwed up my credit five or six years ago and I am working on fixing it. The last four and half years (since I got my current job) I have been perfect and I am paying off old stuff too. Due to me working a ton of overtime lately I haven’t gotten a look at the final contract everything has been over the phone, but I know I am putting $750 down and paying about $37 a week for 3 years. I haven’t seen the discount, trade in, and interest break down yet. I know I will be paying more than I could for a used box ($3,500-$4,500 where I live), and I know some of the money will go to interest. I currently am rebuilding my credit by using a credit card and paying it on time monthly. The rate is 22% which is in line with Snap-On. I need to build credit and would rather do it by eating interest on something I like and will keep for an extended period of time. In order to make room in my budget I cut my fast food consumption down by half. I am able to pay the $37 a week without hindering my family's weekly budget. I know there are better things to spend money on.

My question is why do people freak out about taking on the credit? The payment is manageable to me, and I (think) I am ok with it. I have earned enough OT money to make payments for nearly a year if needed. All the Snap-On credit post I read have people getting over their heads and 80% of post bashing the credit as the devil. Help me understand it please.

lwlobo · Feb 12, 2013

I generally think paying interest, especially anything over 10%, is a waste of money. Have you calculated how much interest you'll pay over the life of the loan? If you're ok with it, go for it.

I think making credit payments to Snap On or your credit card will both help your credit recover, but I could be wrong.

If you've earned the money already, why not pay it off sooner? Buy it on credit an pay it off in 6 months, wouldn't that help your credit a lot as well? Are you making more than 22% in wherever your money is now? Odds are, if you knew how to clear more than 22% by investing, this topic wouldn't be worth discussing!

toolstools · Feb 12, 2013

Because you can buy a lot more tool,for a lot less money, without credit.

CWP1616L · Feb 12, 2013

You're not paying interest on that box are you? You shouldn't have to pay interest on that box. You should be able to get it on truck credit with no interest. That's why everything from Snap-on is so expensive; the interest charge is built into the price.

volaredon · Feb 12, 2013

go to your local bank or credit union and get the money at 1/2 that rate or less...not only is 22% ridiculous they add on a bunch of "paperwork fees" on top of that. I know been there done that because at the time it wasnt a want but a need for my job and I definitely "didn't have it".

theres a ton of "tool truck brand" tool chests on CL in my area, and you can find a dang nice box with someone else taking the "depreciation hit"

NWphotog · Feb 12, 2013

$148 a month for 3 years?! For a tool box?!

back2class · Feb 12, 2013

Sounds like you are a sucker in a suckers game. Plain and simple. Why are you even asking? I have never seen a kid get this far along in a stupid deal and back out. I bet you mostly want to hear someone say you are making a good move. If you want to be a wage slave to Snap-On that is your right as an american, but buying an already overpriced toolbox on horrible credit terms is dumb. It an't to fix your credit...be honest with us and yourself..you are just grasping at straws to justify something you know deep down is dumb.

oldldh · Feb 12, 2013

Don't do it...as a business decision, and that's what it is, it's a really bad one...

Sticking needles in your eyes hurts just about as much, and is a lot cheaper...

Smarter to go used box off CL, or Harbor Freight 56" or www.strictlytoolboxes.com or...

taylorboi · Feb 12, 2013

did you ask your self do you really need a new box and a krl1022 ever thought of a 7022 or 722 which are alittle cheaper if you really need to think about cutting back on eating and bills and family which they should come first. i just got a 1022 myself and i really do love it but it took me along time to get one i started off with a 3 drawer snap on cart paid it off in 3 months then i traded it in for a matco hd full drawer cart paid it off then i bought a kra5318 paid it off right then and there and traded it in for the krl1022 and only owe $500 on it now my point is make a better down payment and the best payments as you can some more then agreed and some at what you agreed on

MattPersman · Feb 12, 2013

Cause 22% is too much you would be better sticking it on a credit card at 17% or a personal loan at 12% etc. 22 is just rough it isn't payday loan or indian loan high but still quite a bit

mopar01 · Feb 12, 2013

If you can get a loan from a bank or credit union that is they way to go. I fianced my box through matco and got a pretty decent interest rate. I couldn't get a loan because I really didn't have any credit, or atleast thatsx what they said.

Brownsfan · Feb 12, 2013

I assume because of your past credit problems that's why the rate is 22 percent. If you do this try and pay 62 a week and don't buy any fast food? Is there an early payment penalty? If there is not pay double. That extra 37 you likely spend on dumb stuff. I know I do.

BOONEY7750 · Feb 12, 2013

lwlobo said:
If you've earned the money already, why not pay it off sooner? Buy it on credit an pay it off in 6 months, wouldn't that help your credit a lot as well? Are you making more than 22% in wherever your money is now? Odds are, if you knew how to clear more than 22% by investing, this topic wouldn't be worth discussing!

I plan to in a sense. I want to keep the account open for a year though, I am under the impression account length is a factor on credit building. I based my budget on my base pay with no future overtime besides what I have banked and not including a side job. I notice the other threads pointed out that the payment can be draining, I was pointing out I can at the minimum support a years worth of payments without sacrificing from my normal budget.

BOONEY7750 · Feb 12, 2013

back2class said:
Sounds like you are a sucker in a suckers game. Plain and simple. Why are you even asking? I have never seen a kid get this far along in a stupid deal and back out. I bet you mostly want to hear someone say you are making a good move. If you want to be a wage slave to Snap-On that is your right as an american, but buying an already overpriced toolbox on horrible credit terms is dumb. It an't to fix your credit...be honest with us and yourself..you are just grasping at straws to justify something you know deep down is dumb.

Very Nicely put, maybe half right too. I am leaning towards being the first you have heard of. Thanks for the call out.

BOONEY7750 · Feb 12, 2013

MattPersman said:
Cause 22% is too much you would be better sticking it on a credit card at 17% or a personal loan at 12% etc. 22 is just rough it isn't payday loan or indian loan high but still quite a bit

I have not seen a credit card with terms much better. Honestly I am getting much better terms with a 640 than I was a few years ago when I was in the low 500s. I have not seen on at 17% at least. My wont go unsecured at this point. Common sense is dictating I may want to wait for a used one and build credit else ware.

firebox40dash5 · Feb 12, 2013

I definitely agree that if you're gonna do it, pay it off quick. Like under a year quick. If you do the math, you'll be surprised how little extra it'll take- it's not like you'll have to pay triple to pay it off in a year vs. 3 years. Get the principal paid down fast so you're not paying 22% on almost the full amount for long.

Account length is a factor, but unless SO closes the account when you're done paying, it's not going to matter. Honestly, different banks look at different factors in different ways... enough that outside of the simple like pay your bills in full and on time, there's no guaranteed thing they'd like. One bank might like to see low balances, because that means you spend responsibly and don't have much debt, while another might prefer that your accounts are almost maxed out, because it means you like to spend, and you're close to being maxed out on debt, not like you could run up another $25k on credit cards and be over your head. Freaky.

Pumpman1968 · Feb 12, 2013

A cool trick is charge it to a credit card and then transfer the balance to another credit card. They are usually running promotions when they don't charge interest for 2 years on balance transfers.

FunkyfullWidth · Feb 12, 2013

with an uneasy credit history don't be surprised if snap on doesn't give you the full loan amount. then you either won't get the box, or have an open ra account and a snappy credit line. I was told 44 a week, when in reality the payment is closer to 75 to keep snap on happy. there are far easier ways to build credit. A snap on credit line is the more difficult route. A small personal loan through a local bank is probably the best way to do it. Smaller monthly payments, less intrest. I'd say pay for as much of the box as possible. Plus, if you pay off a loan to fast and don't hold that line of credit for a certain amount of time it won't help your credit that much.

flippin · Feb 12, 2013

There are numerous ways to build credit and taking on another luxury purchase at ridiculous terms is not one of them. Much like the others have said, if you are genuinely sincere about re-establishing your financial health buying a $4000 dollar tool box is crazy, buy used, buy HF buy anything that is inexpensive and do this in stages. In the interim, use your credit card for essentials and pay the card off monthly. Buy your groceries using your credit card and pay it off monthly. At least this way you will be fortifying your credit rating on items for your family. Furthermore because you have been pre-approved by Snap-On credit, walking away this time will prove to them that they better sharpen their pencils when you speak to them in the future. Your driver will realize that you're serious and I suspect if your are responsible in the meantime your credit rating will have improved and perhaps if need be you would qualify for a bank line.

Don't do it, but I think you already know what the right answer is.

Buckgnarly · Feb 12, 2013

Pumpman1968 said:
A cool trick is charge it to a credit card and then transfer the balance to another credit card. They are usually running promotions when they don't charge interest for 2 years on balance transfers.

That can reflect poorly on your credit.....there is no free lunch in the world of credit!

oilfieldtrash4 · Feb 12, 2013

$37 a week for 3 years is $5772 then add $750 down that's $6522. Now tell us the exact box you'll be buying for $6522? Then we'll tell you if it's a good deal.
Btw what are you trading in?

Cryptic1911 · Feb 12, 2013

Pay Snap-On prices AND interest? You're a glutton for punishment, eh?

NineFingerFury · Feb 12, 2013

I know people will disagree with me on this, but I think credit is a loser's game. It's a scam created by banks. Your credit score is an "I love debt" score.

I encourage everyone to check out http://daveramsey.com.

As for the student loan comparison, my wife's parents encouraged her to get a degree before we met, (which is great) but when she graduated with $35,000 in debt and couldn't get a job in her field, that *****. We're almost debt free 2 years in except for the house. I REFUSE to buy anything with credit EVER again.

Simply put, if you can't pay cash, you can't afford it.

http://www.hulu.com/watch/1389

My 2¢.

dsmnickk90 · Feb 12, 2013

Paying 6k for a box that is almost 10k retail is a pretty good deal depending on what your trading in.

BOONEY7750 · Feb 12, 2013

Trade in was a Craftsman ball bearing 26" lower. My dealer gave me what I though was a great deal on his end with the trade in and service, but the Snap-on rates are the killer. I know I do not need it. I am doing the right things on the credit rebuilding, just get tired and beat down on rebuilding the "right" way of just continuing paying bills.

I love this site for honesty and information. Thanks Guys

I called my dealer today and backed out of the original deal. I am trying to avoid dipping into my family budget and savings outside of supplemental income. I can dip a little if the deal was right such as a cash purchase. Does anyone have have experience with the 90 days same as cash and how the remaining balance charged for the rest of the term? Such as if I paid of the balance except for maybe $1,000 in the 90 days. Will interest be applied to the hole amount or just the remaining $1,000?

gsmornot · Feb 12, 2013

NineFingerFury said:
I know people will disagree with me on this, but I think credit is a loser's game. It's a scam created by banks. Your credit score is an "I love debt" score.

I encourage everyone to check out http://daveramsey.com.

As for the student loan comparison, my wife's parents encouraged her to get a degree before we met, (which is great) but when she graduated with $35,000 in debt and couldn't get a job in her field, that *****. We're almost debt free 2 years in except for the house. I REFUSE to buy anything with credit EVER again.

Simply put, if you can't pay cash, you can't afford it.

http://www.hulu.com/watch/1389

My 2¢.

Followed his plan myself. I'm down to the house and what is left of a new car. Should have it knocked out soon its been almost 6 months since it was bought. Cash for everything is by far the best way to go, you never owe anyone a thing and if it all goes south what you see is what you keep. Just need enough to keep the lights on. It's a lot more boring this way, we used to have tons of cool gadgets and new junk around the house to play with but not anymore. We're left with what we need a a couple of things we want that are completely paid for. Sleep is easier at night and the accounts look better because of it. We started the plan about 5 years ago now, well worth it.

oilfieldtrash4 · Feb 12, 2013

Try the 44" HF and see what you get out of it. Let the others drink the snap on kool aid. Snap on boxes wear out at a slower rate but cost at least 3-4x as much. I'd much rather be working out of a new HF box every 5 years than paying snap on 5k for a box.

back2class · Feb 12, 2013

Well I just wanted to follow up. Are you a business person as another poster so wisely put? You are running a small business if you did not already know that. Every choice you make should be a cost analysis. I own a small business and can assure you we purchase the equip we need and only what we need and at a price that makes it a wise purchase. If the $1sf carpet will cover just as well and last 80% as long as the $2sf carpet, we go with that. That is how you build real wealth...being on the right side of capitalism! Not saying you need to work out of some hobbled together craftsman boxes, but be smart. If you want to have a box that is nicer than just good enough that is fine. Get a screaming deal on a used box and sell it for more when you don't wan't it. It wont cost you interest and it wont depreciate. Then it is also an asset for you you can leverage if you need or want to. Say a deal comes up you can make a quick $7,000 on or you want to buy a house and suddenly a nice house seems and some crappy box seems a WHOLE lot cooler than a fancy metal box. Well, you can sell that box or possibly pawn loan that asset...let the financia system work for you rather than you working for it. That is much cooler than you being an asset in SO credits accounting books. Let's face it, there are plenty of morons and stupid kids turning wrenches. Just because you see many doing this does not make it smart.

Mike.ASC · Feb 12, 2013

The real bigger question is why do people think "credit" is so important . A dime spent on interest is a dime's worth of slavery to the lender . Be different and do the smart thing , save the money first then when you have the cash to buy what you want see if you still feel like you need that item - theres a good chance you might reconsider . Credit is a tactic used on people that won't exercise personal discipline to convince them they deserve something they don't have the money for .

tsonka · Feb 12, 2013

taylorboi said:
did you ask your self do you really need a new box and a krl1022 ever thought of a 7022 or 722 which are alittle cheaper if you really need to think about cutting back on eating and bills and family which they should come first. i just got a 1022 myself and i really do love it but it took me along time to get one i started off with a 3 drawer snap on cart paid it off in 3 months then i traded it in for a matco hd full drawer cart paid it off then i bought a kra5318 paid it off right then and there and traded it in for the krl1022 and only owe $500 on it now my point is make a better down payment and the best payments as you can some more then agreed and some at what you agreed on

I'm going to x2 this post.

I understand needing a new box and wanting something nice. If your wanting Snap On, which I dont blame you, would a 722 work? A 722 is a nice box and is the same build / fit and finish quality as the other KRL's, there just not as deep and the more expensive KRL's have better casters for higher load rating.

If you need the box room then you need the room bot no reason to over spend.

Go talk to a bank too, see what interest rate you will get from them.

ACepero · Feb 12, 2013

Mike.ASC said:
The real bigger question is why do people think "credit" is so important . A dime spent on interest is a dime's worth of slavery to the lender . Be different and do the smart thing , save the money first then when you have the cash to buy what you want see if you still feel like you need that item - theres a good chance you might reconsider . Credit is a tactic used on people that won't exercise personal discipline to convince them they deserve something they don't have the money for .

That works for smaller items, but for bigger ticket items, credit is very important. Don't know too many people that can buy a house or a new/CPO car with cash. In those instances, credit is required. And good credit will save you money on interest.

For example, I paid cash for my mountain bike and road bike. And all the upgrades and parts on it. However, my house is mortgaged and my car is financed. Without good credit, I'd get hosed on the interest rates.

RKA · Feb 12, 2013

Before you work on your credit rating you need to get your brain around fiscal responsibility. I'll skip the lesson on the practicality of an expensive box and what that will cost you years down the road. Spend a little time with a calculator to understand what interest means in terms of the final selling price. $4200 borrowed over 3 years @ 22% = $5774 in total payments. That's a 38% markup on that loan amount, which is enormous in the current environment where interest rates are next to nothing! $1600 just tossed out the window for nothing in return. Your borrowing costs elsewhere should be much lower even with your credit issues. If you don't have the cash that's fine, weigh out your options and borrow at the cheapest rate you can get.

People generally understand the concept of comparing price tags, but somehow when interest rates come into the equation, sense, reason (and math) go out the window. Don't be one of those people. You will need an understanding of all this to buy your next car, house and plan for retirement, kids education, etc. You can work half as hard and get to the same place just by making good decisions about how you use your credit.

Rebuilding your credit comes with time. You're not going to rush things by taking out a loan with Snap On. Keep using the cc to cover monthly expenses and pay off at the end of the month. For bigger items, carry the balance and pay it off according to your set goals. Do that for a while and when the time comes to replace a car, shop for your car loan. Again, that will build up a credit history. Good luck.

Spudland_Dave · Feb 12, 2013

gsmornot said:
Followed his plan myself. I'm down to the house and what is left of a new car. Should have it knocked out soon its been almost 6 months since it was bought. Cash for everything is by far the best way to go, you never owe anyone a thing and if it all goes south what you see is what you keep. Just need enough to keep the lights on. It's a lot more boring this way, we used to have tons of cool gadgets and new junk around the house to play with but not anymore. We're left with what we need a a couple of things we want that are completely paid for. Sleep is easier at night and the accounts look better because of it. We started the plan about 5 years ago now, well worth it.

You can add me to that list of "followers" as well...although I was doing "Ramsey" style before he wrote his first book...as he says himself, its just using your grandmothers common sense.

Once you start paying cash on a tool truck, prices & deals change dramatically. My truck guy owes ME money...not the other way around.

RKA · Feb 12, 2013

The hidden opportunity here is that you've figured out a way to carve out some money from your budget. If you decide not to buy that box, consider investing it so that money will grow over time. You can invest conservatively or aggressively, but that money has the potential to grow into a nest egg for a house, emergency fund or even retirement (even if that's not on your radar). I promise you one day you'll be looking over your finances and say "I wish I started saving 10 years earlier". Because that extra 10 years in compounded earnings means more than huge deposits into your savings account. Here again, spend a little time with a calculator and you'll see how much you'll need to put in the bank at ages 50-60 to make up for the money you may not have put away at the age of 20-30. The answer to that will be eye opening.

rsanter · Feb 12, 2013

if you can afford 150 to 200 per month then put it aside in a seperate account and in a few months you will have a chunk of change. buy the box then and put that chunk down so you can then pay it off faster. I understand that you can help your credit by paying them interest but it will help as much if you get to the point that you can pay it off in a year so you dont pay them as much in total interest

bob

2jz4me · Feb 12, 2013

Ill sell you my kr650 for $900 and only charge 5% interest.

NineFingerFury · Feb 12, 2013

ACepero said:
That works for smaller items, but for bigger ticket items, credit is very important. Don't know too many people that can buy a house or a new/CPO car with cash. In those instances, credit is required. And good credit will save you money on interest.

For example, I paid cash for my mountain bike and road bike. And all the upgrades and parts on it. However, my house is mortgaged and my car is financed. Without good credit, I'd get hosed on the interest rates.

Why do you need to finance a car? Dumb. Only goes down in value. And who needs to buy a house? Rent until you get your stuff together.

braol · Feb 12, 2013

In my opinion if it isnt worth the effort to save up the money and pay cash it isn't worth buying, except for a house. Reason I say this is you are going to pay rent anyway so why not make that money count toward your home. But that's a different discussion altogether.

IMO, pay cash for a used toolbox just like you pay cash for a used car. Let someone else take the initial depreciation. Now I will say I do keep a tab on the SO truck from time to time. Actually have one right now, I figure I am paying the interest that is built into the price anyway might as well make them work for it.lol

lennoxlennox · Feb 12, 2013

getting access to the snapon credit is ok

using it to your advantage is ok, i.e. paying it off each month or thereabouts

it will help repair your credit score to have one, but that doesn't mean you have to have a balance, pay it off each month

the problem is that they give a huge limit, i was 17 and matco gave me something like 12,000, i mean come on, how irresponsible of them is that, but they know what they are doing

the problem with them is that not only is the interest rate high, it makes it too damn convenient, you know, the truck comes around and you start looking and you think... hmm i could use that, you look in your wallet and realize there's nothing then you think... oh ya... then you start thinking... no, i NEED that

then you just keep paying the minimum... well you know the game

it's a dangerous one, if you have the self control and planning to pay it off, go for it, but that takes lots of discipline and a strong resolve

as you stated you have some very bad experiences with credit and are still hurting for that.... that in itself should make you very wary of any credit and to treat it as serious potential problem

if you can only afford it with credit, than you can't afford it

NineFingerFury · Feb 12, 2013

I'd like to clarify that I don't mean you shouldn't buy a house until you have all the money to pay cash. That would be cool, but I'll be realistic. If you're out of debt and have emergency money stored away, plus enough to put down a decent down payment on a fixed rate 15-year mortgage, then go for it.

I've just seen too many people get burned by doing things on credit because they "know what they're doing."

My wife and I make enough to have a bigger home in a nicer neighborhood and we could drive nicer cars, too. What keeps me from doing that is getting out of debt. We're currently paying $2,500/mo on student loans her parents said was "good debt" so we can be done in 2.5 years instead of the standard 10. That means I drive a 1987 Accord and she drives the 2009 Corolla I bought and paid for before we got married. I could go on and on about credit and debt, but I won't. Sorry. End of rant.

Snap-On Credit Debate (school me on why not)

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