Review offers fully before signing up

Some interesting offers may be showing up in your mailbox. Our “opt-out” period must have expired for receiving offers for credit cards, mortgages and other types of credit as more are showing up each day.

Seed offers

The ag community has certainly picked up the ball in this game as two recent mailings indicate: The first offer came in August from a seed company. It was a team effort, pairing themselves with a well-known machinery company that has branched into ag financing.

Bold red print screamed at me: “Your Action is required to Participate…in this incredible offer.”

Now, I usually give these mailings a quick scan to see what they are offering, usually get a chuckle or two and then shred them. Since it was a busy time of the year, I tossed it on a pile of things to get to later.

Suddenly, it is September and another letter comes from the same seed company. Interestingly, it involves a different ag lender, not the first one who had not only offered us credit, but put a number to it, offering 6 figures of pre-approved credit (really? we’ve never bought that much seed in three years combined, let alone one), so I dug out the first letter to see how they compared, wondering why the seed company would have two partners.

On the first quick read, they appear to be offering essentially the same deal: 0 percent financing if you open your account and buy your seed before Dec. 19.

One offers “eligibility” to receive percent off on your seed order if placed before Nov. 19, “eligibility” undefined. The other requires a minimum seed purchase of $7,500. If you miss those deadlines, another offer is made for 1.9 percent financing for 120 days for seed purchased between Dec. 20 and June 15.

OK, if I bought a lot of seed and didn’t have or want to lay out the cash right away, or didn’t want to put a seed purchase on my regular line of credit, these might be useful tools.

I especially like 0 percent financing when the rules are clear and dollars will be available to pay the balances on time and in full. However, one letter has not stated when the dollars need to be paid back on the 0 percent offer.

Fine print

The other clearly states that payment is due in November 2013. Time to dig through the fine print. Not playing by the 0 percent rules can be costly if the terms indicate either interest will be accrued on the balance from the beginning of the 0 percent period, and/or it starts accruing at a high rate.

Both offers came with account agreements, lots of words and tiny type. I didn’t need the tiny type on one offer, because the cover letter clearly stated that if I bought seed using the 1.9 percent/120 days offer and didn’t want to pay it back until later, the interest rate would jump to a prime (about 3.5 percent) plus 11.9 percent APR — a hefty return for the finance company.

Interestingly, the other company’s fine print indicated a nondefault rate of prime plus 10 percent, but a call to the company to determine what the due date was for the 0 percent note, led to the information that the rate after 120 days for this particular program was prime plus 0.5 percent (I would get that in writing if I was planning to participate in this program — 11.4 percent is a big difference).

Is this enough information to make a good decision? There are still a few unanswered questions: Is there a minimum purchase required for the second offer? What seed are “eligible” seeds — wording used in one offer?

One offer doesn’t require any payment during the 1.9 percent/120 day offer. Is the other the same, or do payments begin right away?

Sometimes these offers can be helpful and a good business tool when used with full information and discipline. Fully reviewing and understanding the terms before entering into these agreements is a critical step in making good decisions and protecting your business. Turn on the reading lamp, call and ask questions, get it in writing, and make good decisions.