Cash or Credit?
What should you use to buy big-ticket items?
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Sometimes using your credit card to make expensive purchases is better than paying cash or check.
It's a question many of us ask while we're making holiday purchases: Do you pay cash or credit?
NBCLA has found there are good reasons to consider putting purchases on your credit cards, instead of using cash or a check. The top reason: Credit card issuers offer you some protection if you have problems with a store or merchant.
That's a lesson that has been learned by customers of Serv-Well Appliances in Glendale, an appliance superstore in business since 1947. The last few months, many customers paid Serv-Well big deposits to buy kitchen appliances.
"They were recommended by everybody," says Ed Salero, who paid Serv-Well nearly $8,000 down for appliances for his kitchen remodel.
His friend Richard D'Argenzio, who was also remodeling his kitchen, gave Serv-Well a $5,000 deposit.
But over a month later, neither man received his appliances. They went down to Serv-Well, and found it had suddenly gone out of business and disconnected its phones.
"The first thing I thought was, we just got taken," said Salero, who had put his deposit on his American Express card.
When he told AMEX about Serv-Well's closure, they "suspended" the charge from his account. AMEX is now investigating, and it might remove the charge permanently. Ed says credit card companies have removed other charges from his accounts in the past, such as a magazine subscription he paid for, but never received.
D'Argenzio, who paid Serv-Well a deposit by check, might never see his $5,000 again.
"I feel pretty crummy. I mean, it's $5,000. That's a good hunk of money," says D'Argenzio.
He says his only hope of recovering his deposit is by suing Serv-Well in small claims court. But at this point, he can't even find out who owned the appliance store, so he doesn't even know whom to sue.
If you dispute a charge with your credit card company, they won't guarantee it will always be permanently removed from your account. But they do promise to investigate and try to resolve the dispute to the customer's satisfaction. There's a good chance a charge for a product that's never delivered will be permanently removed from your account.
"We take it on a case-by-case basis," says Desiree Fish, a spokesperson for American Express.
Salero and D'Argenzio say they both learned a big lesson from their Serv-Well ordeal.
"I would never make a deposit with cash or check, knowing what we just went through," says Salero.
NBCLA did try contacting Serv-Well's attorney to find out why the store took deposits from customers just weeks before they went out of business. Its attorney never returned our calls.
