Consumer Reports warns about rent-to-own stores

NEW YORK (WABC) -- Looking for an affordable way to buy that new refrigerator or living room set? Shopping at a rent-to-own store may seem like the best option, but some of those so-called deals could end up busting your budget.

Ads for rent-to-own stores tend to appeal to consumers with credit problems.

Consumer Reports took a close look at some offers at the industry's two biggest chains, Rent-A-Center and Aaron's.

They found their monthly payment plans could cost you hundreds of dollars more than paying outright.

"If these were loans, the equivalent interest rates would be between 50 and 150 percent," Consumer Reports' Mandy Walker said.

Channon Moore didn't have the money for a washer and dryer, so she went to an Aaron's in Georgia. She signed up for a 24-month lease with the option to buy at the cash price within 120 days.

She says she had the money to pay it off in time, but an Aaron's rep said she'd missed the deadline.

Now, she's on the hook to pay a total of more than $3,600, twice what it would have cost at a big box store.

A spokesperson for the rent-to-own industry says it offers an important service. But Channon Moore disagrees.

"I've invested so much money already, I have no choice but to continue to pay or to take the loss," she said.

Consumer Reports advises you to take a close look at the contract and make sure you can afford to make the payments on time.

Even better, they say, save up your money and pay up front.