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There is a new way to buy at Kmart.
On November 22, the retail chain is introducing a program that will allow customers to purchase products on a lease-to-own basis. The program is aimed at consumers who do not qualify for credit, thus giving them the option of buying a big-ticket item such as a television.
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The program is encountering some controversy because it charges an annual interest rate that is the equivalent of more than 100%. Over the course of the payoff period, a $300 item would end up costing about $415. Critics have expressed concern that this program can financially hurt low-income customers.
Note to Kmart: It will financially hurt anyone who buys something this way. That’s what happens when you introduce a payment method with an interest rate high enough to make Tony Soprano’s collection guy blush.
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When you do rent-to-own, the “rent” owns you. And those sky-high interest rates happen everywhere you do rent-to-own, not just at Kmart. Want to avoid hurting your money? Avoid leasing.