Dell Preferred Account

I've heard people use this to get 2% off of Dell purchases, but it seems like a terrible decision. They pull a hard credit check on your account and open up a line of credit, right? Can someone who's used it explain it?

 

I just purchased my new 9400 this week and I'm paying with a preferred account. Because I just started earning a credit score, I was only able to get a $2500 line of credit, which was just enough for my $2471 notebook. The thing to be careful of is the interest! Right now, they have a 'No interest until 2007' deal going on. If you are able to pay the full amount by January 1st, then you're fine...BUT...If not, and you choose to use all 48 months, you would be paying almost double your purchase price once you're through. Just make sure you get all the info from the sales rep.

 

so its not like its a dell credit card? its just if u have a good credit report, then you get that?

 

It is similiar to a credit card like the interest.

 

so u dont get a card? they just make sure u pay off in time?

 

Just so you guys know, I think Dell performs a "hard" credit pull that will lower your credit score by about 5 for about 6 months.

 

and why is that? and what is a hard credit pull? sorry for all the question...im new to the whole DPA thing

 

A "soft" pull is one that does not affect your credit score. You can get 1,000 of these and it won't matter as they are not visible to other people checking your credit. These are often done without your knowledge as long as they have a "permissible purpose by law", and may include:

A new credit card issuer or mortgage company wanting to send you a "pre-approved" loan offer.
An existing card issuer (like Citibank) checking up on you periodically to make sure you haven't been going nuts and opening 37 other accounts.
An employer doing a background check before a job offer is extended.
Checking your own credit history and/or score.
A bank just verifiying your identity when opening an account.

Conversely, a "hard" pull is one that does affect your credit. It is supposed to only happen when you give express permission to do so, usually when you are seeking some form of credit or insurance. It will lower your FICO score by about ~5 points temporarily for ~6 months (and it will then bounce back), and will also be visible to future people checking your credit.

*copied from mymoneyblog.com

 

Why would they want to lower your credit score? 0__o

 

So that others will see your lower credit score and not loan you as much, thereby ensuring that you will have less debt which results in less payments, which increases the odds that you will be able to make payments on your Dell Preferred Account, of course


I am, of course, kidding...

 

They don't want to hurt us (I hope), but I think hard credit checks may indicate credit risk or trouble and lower your score.

 

For anyone who is thinking about using a monthly payment method, just make sure you get all the details from the sales rep, including the final price. If you plan to use all 48 months, expect to pay almost double for your purchase. Find out if they are running a 'no interest' promotion and try to make the full payment by the due date.