Best Buy Financing Offers: How Does It Work and Is It Worth It?

We get it–maybe your laptop died or your fridge has seen better days and you’re short on cash. You head to Best Buy and see they offer financing. It’s pretty tempting since it looks like you may not have to pay any interest.

Before you sign up, ask yourself whether it’s worth it. That’s because if you can’t meet their requirements, you could find yourself with a much more expensive purchase than you bargained for.

The honest truth is that Best Buy financing can work for many folks, but it’s not for everyone. Let’s take a closer look to see what it really offers plus some of the benefits and downfalls of this offer.

What is Best Buy Financing and How Does It Work?

Best Buy financing is a program exclusively at Best Buy where you can make qualifying purchases at the retailer and interest is deferred for a specific period of time. You’ll need to meet certain requirements, such as a minimum purchase amount for qualifying items and the financing period can differ.

How it works is that once approved, you’ll get a Best Buy credit card (there are different ones, which we’ll cover below) and you’ll put the purchase on it. The interest is deferred until the financing term is over–you’ll be subject to minimum payments each month. As long as you pay off the purchase within the agreed amount of time, you won’t’ pay interest.

Financing terms can range from six to 24 months–typically the higher the purchase amount, the longer the term. If you don’t pay the entire balance off within that period of time, then you’ll be charged interest at the regular APR (which tends to be higher than other credit cards).

Keep in mind that Best Buy’s website warns that you may need to pay more than the minimum monthly payment indicated on your statement in order to avoid paying interest, especially if you financed more than one purchase.

In other words, you’ll want to calculate to see how much you’ll need to pay each month in order to avoid paying interest.

Can You Get Best Buy Financing With Bad Credit?

Before looking into your chances of approval, let’s first talk about the credit cards that are available through Best Buy.

There are two which are available for financing: the My Best Buy® Visa Card and the My Best Buy® Credit Card. The latter option is only for Best Buy purchases, whereas the first one can be used wherever Visa cards are accepted. Both will also earn you cash back rewards for Best Buy purchases, but the Visa card also offers various cash back rewards on other purchases.

As for whether you can get Best Buy Financing with bad credit, that depends. First, you won’t have a choice as to which card you’re approved for–you’ll find out after filling out an application form. Generally, the higher your credit score, the more likely you’ll be approved for the Visa card. If your credit score is on the low side, Citibank, Best Buy’s card issuer, may think you’re too much of a risk and won’t approve you.

If you don’t get approved for financing because of a low credit score, consider delaying your purchase or work to increase your score so that you will be more likely to be approved.

An additional and relatively new solution is to get a small loan from one of the “Fintech” loan companies. Unlike the brick n’ mortar lender, you can get a loan offer that is customized and priced to your needs and status. Those are some of the best lenders you can approach. Try to compare as many offers and choose the best one:

• Monevo (read full review)
• SoFi (read the full review)
• Credible (read the full review)

Should You Use Best Buy Financing?

Best Buy financing is best for those who plan their purchases carefully. In other words, you will budget carefully and make sure you pay off your balance within the agreed-upon timeframe to avoid interest. Otherwise, you’ll need to pay the deferred interest. As mentioned previously, the APR on Best Buy credit cards is typically higher compared to other options.

If you have an excellent credit score, there are other interest-free options which can help you earn rewards on your purchase. For those who aren’t sure they can pay back the balance, consider choosing another option that offers a lower interest rate.

Financing is also best for those who are looking to build their credit and are interested in financing a relatively small purchase–for example, $200 or so. That way, the payments are manageable and making on-time payments will help increase your score.

What Are Some Alternatives to Best Buy Financing?

Instead of financing through Best Buy, one of the best ways to avoid interest is to pay for it in full–save up cash for it. If it’s not a purchase that’s necessary right away then think carefully about whether you can hold off buying it until you can afford it.

You can also think about looking for a used version or an open box item (it’s new but the box has been open so it can’t be sold at the regular retail price) so that it’s more affordable and you don’t have to save as long.

Saving up money for a purchase is as simple as setting a goal for yourself. For example, let’s say you want to purchase a new washing machine with a price tag of $600. Ask yourself when you want to make the purchase and see how much you’ll need to save each month. So, if you think you’ll need one in eight months, then you’ll need to save $75 every month.

Otherwise, consider a credit card with a 0% APR offer for purchases if you can qualify for one. That way, you can potentially finance your purchase for a longer period of time. Plus you’ll be able to earn rewards, assuming you signed up for a rewards credit card.

Whatever your choice, make sure you do some calculations to see whether the Best Buy purchase will fit into your budget. That way, you’ll be well prepared and not caught off guard (and pay a ton in interest) if you can’t pay off the balance in time.