Should I Pay Cash for Large Purchases or Finance It?
This is one of the 20 tough financial questions posed in the “Do This or That?” cover story in the September 2011 issue of Kiplinger’s Personal Finance.
This is one of the 20 tough financial questions posed in the “Do This or That?” cover story in the September 2011 issue of Kiplinger’s Personal Finance. Use the drop-down menu above to consider other financial conundrums and the right answers for you; share your own experiences and insights in the Discuss field at the bottom of this page.
Pay cash if the item you’re buying depreciates rapidly. That includes nearly everything you’re likely to bring home—including appliances, computers and cars. Why pay interest on something that loses value over time? (Your cash isn’t earning buckets of money in the bank anyway.) Plus, paying cash reduces the risk of buying more than you need. If you don’t have enough cash to buy it brand-new, then buy it used.
Finance it if the purchase is a necessity and you don’t have the cash, you qualify for low-cost credit, and you’ll pay back the balance as quickly as possible. You may also want to charge it if you need to build a credit history.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
SEE ALSO:
QUIZ: The Truth About Credit and Debt
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
What About Those ‘Guaranteed’ Life Insurance Ads?
Guaranteed life insurance policies can sound tempting if you've been declined for insurance elsewhere. Here are four downsides and one alternative.
-
13 Answers to Pressing Social Security Questions
From smart claiming strategies for couples to tips on maximizing your monthly check, we have advice that can help you.
-
Roth IRA Contribution Limits for 2025
Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
Costco Cyber Monday Deals Are Here
Costco has rolled out dozens of Cyber Monday deals. Shop and save now through December 2.
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute Vacation
Travel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?
insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
-
Five Reasons You Shouldn't Shop on Amazon Prime Day
Smart Buying Think twice before getting lured into buying a bunch of stuff you don't need just because it's on sale.
-
When Is Amazon Prime Day? Everything We Know So Far, Plus Early Deals
Amazon Prime Here are the key Amazon Prime Day dates and details you need to know, plus some of our favorite early deals to shop ahead of the sale.
-
How to Shop for Life Insurance in 3 Easy Steps
insurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.