The question of how to pay for a large purchase is tied to a series of either/or choices. Cash or credit? Save or borrow? Now or later? Many people believe they should save up before buying to avoid debt. Unfortunately, experts say there is actually no easy, one-size-fits-all answer to the cash-versus-credit question.
Saving up to buy a big-screen television or washing machine often makes sense, because by not going into debt you avoid interest that adds to the item’s bottom-line price. But what if you need that washing machine right away because your current one just broke down? What if after a year of saving, the washing machine has gone up in price more than the interest you would have paid to charge it? What if the washing machine is on sale, and the store’s offering no money down and zero percent interest for 12 months?
