Rent-A-Center is a store that offers rent-to-own furniture, electronics, and appliances. Rent-to-own can be a great option for those who can’t afford to pay for these items up front, but this seemingly helpful option can have some negative implications if you’re not careful. In this article, we will discuss how Rent-A-Center works, and what can happen if you don’t make your monthly payments.
How Does Rent-A-Center Work?
Similar to many other rent-to-own services, Rent-A-Center offers brand new and like-new (refurbished) merchandise that can be paid off over a period of time. Many retail stores offer buy now pay later options for expensive items like smartphones or laptops, but Rent-A-Center is a bit different because it’s rent to own, and not financing. When you buy on a rent-to-own plan, you’re leasing the item, and you don’t own it outright until you’ve finished making all your payments.
To rent an item from Rent-A-Center all you need is an address, a job, and four references. Rent-A-Center states that you do not need good credit or a credit history; however, according to the fine print, this doesn’t mean that Rent-A-Center will not perform any credit checks. Instead, they may be willing to overlook bad credit, and overall they don’t require you to have a credit history.
Rent-A-Center payments are always a set number dependent on the payment plan you choose: there won’t be any interest charges. Rent-A-center also delivers and sets up all items (though they cannot set up appliances that need to be connected to a gas line), as well as replace or repair them if they malfunction. Delivery, set up, and replace/repair costs are also included in the payment plan, and won’t cost extra.
The major disadvantage to rent to own is that over all, you’ll pay more than the purchase price. The price is higher because you pay over installments, and also because you’ll have other fees included like service fees or a rent to own fee. These rent-to-own-specific fees may be included in the total price so you don’t see them individually, but they are a factor in calculating the total price.
But if you can’t afford an item upfront, rent to own can be advantageous over regular financing. At Rent-A-Center, one advantage over traditional financing is the option to return and pause payments. If you buy a laptop and find that you can’t afford to keep making payments on it, you can return it to Rent-A-Center at any time and not have to worry about making payments or being in debt. You won’t get your money back, but the store will keep a record of the amount you paid toward that item.
Later, you can return to Rent-A-Center and get your laptop back, or a laptop of similar value. The money you spent on the first laptop will be put toward the second one. You have up to two years to come back and re-rent your items; Rent-A-Center will only keep your payment records for a period of two years after you’ve made a return. If you used financing, for example put the item on a credit card, you could make smaller payments if you needed to, put you’d continue accumulating interest on the amount owed.
Rent-A-Center Policy for Non-Payment
A few different things can happen if you don’t pay for your rented items. If you can’t make your payments to Rent-A-Center, try calling them first to see what options you may have. They may be willing to negotiate with you if you are simply going to be late on a payment, or if your situation is only temporary. This will depend on the store manager and may vary store to store, but it doesn’t hurt to ask! If you really can’t make the payments, then your best course of action would be to return the item. If you don’t, it could lead to a drop in your credit score and even legal consequences.
What Happens If You Stop Paying Rent-A-Center?
To learn more about how Rent-A-Center deals with missed payments, we called up their customer service hotline. According to customer service, every case is different, so it will be treated accordingly by Rent-A-Center. Furthermore, it is typically up to the store manager to decide what to do about late payments. If a new customer misses their very first payment, likely Rent-A-Center will make an effort to contact them immediately, as missing the very first payment is considered suspicious. On the other hand, if a long time customer were to miss a payment, they would not necessarily be contacted right away because they may just be running late.
According to customer service, there is a late fee, but it varies by store. If you communicate with your Rent-A-Center, you can avoid the late fee or have it waved. Rent-A-Center claims to be willing to work with its customers to the best of their ability, so long as the customers make an effort to communicate and are honest about their situations. A long-time customer who has been reliably making payments and just happens to miss one will often be forgiven and given a second chance or extension to make the payment.
Can Rent-A-Center Take Legal Action Against You?
The consequences of refusing to pay Rent-A-Center are mainly dependent on state law, so it is important to learn about your own state’s laws to truly understand the potential consequences. Rent-A-Center can’t do much on their own aside from reporting missed payments to credit reporting companies. Beyond those actions, the limits of what happens will depend on state law. Here’s how things will generally play out.
Typically, Rent-A-Center will try to get in touch with a customer who isn’t making payments. First, they will try calling them directly. If that doesn’t work, they’ll try calling the references the customer listed and seeing if they know how Rent-A-Center can get in contact with the customer. Rent-A-Center may even try visiting the address the customer put down when renting merchandise.
If the customer can’t be contacted, then Rent-A-Center may take legal action in civil court. The court will determine the amount of damages owed or provide another remedy. If Rent-A-Center wins their case against a customer, then the court ruling may simply be for damages in the amount that the customer still owes to Rent-A-center.
In other cases a fine may be included, and in extreme cases a customer may spend time in jail. As we discussed in a similar article, Can You Go to Jail for Not Paying Aaron’s? The Debt Collection Process, technically there are laws in place to prevent citizens from receiving jail time for not paying civil debts. However, courts in some states have found ways around these laws. For instance, the court can issue an order for the customer to appear at a hearing or to make a payment. If the customer fails to abide by the court order, the court can then issue a warrant for their arrest. Upon arrest, a bond will be posted for the same amount as was in the original court order, and the customer must pay it in order to be released from prison. This is not possible in all states. Some states have strict citizen-favoring laws surrounding rent-to-own services, making it impossible to face jail.
The best thing you can do to avoid legal consequences is to communicate with your Rent-A-Center, or simply return items that you cannot afford to pay for. There are some people who try to take advantage of rent-to-own services by renting brand new merchandise and then selling it elsewhere to make quick cash. This is illegal, and Rent-A-Center can and will take these people to court for it, and the court may charge these people with theft. As long as you communicate with your Rent-A-Center and don’t do anything illegal, you don’t need to worry about going to court or jail. Rent-A-Center generall won’t call the police or press charges.
Can You Get Out of Your Rent to Own Contract?
There are two ways that you can get out of your rent-to-own contract. The first is what we discussed earlier: simply return your item and Rent-A-Center will keep a record of your payments to be used on a future purchase of a similar item. The other option would be, if you can afford it, to pay the remaining balance of the item. If you pay it off in full, then, of course, you will have completed the stipulations of the contract and be freed from it.
You could also get out of your current contract by starting a new contract. Rent-A-Center allows you to “upgrade” your merchandise whenever you would like to, and then they adjust the payments accordingly. Of course, getting out of one contract by opening up another isn’t ideal, so it’s probably better to stick to the other two methods.
Rent-A-Center offers customers the option to pay for expensive merchandise over a period of time, and, unlike credit card companies, doesn’t charge any interest. Customers can return items at any time, and Rent-A-Center will keep a record of their payments on file so that they can pick up where they left off in the future. This is the best course of action for a customer who can’t pay for their merchandise, as failure to pay can have negative consequences, some of them legal. These consequences can include a lowered credit score, fines, and in extreme cases, jail time. The best way to understand the consequences of failing to pay for rent-to-own merchandise is to learn more about the laws of your state, as this will determine the decisions a court can make surrounding rent-to-own disputes.