What Is a Dell Preferred Account?

When paying for a purchase at Dell, you always have the option to use credit and debit cards. Certain Dell Home customers can also pay using a Dell Preferred Account. The service's name makes it sound like an exclusive program for elites, but this financing program is available to many shoppers. Dell Preferred Accounts provide a quick line of credit for those who qualify, but may not be a good choice for everyone.

Dell Financial Services and its affiliate WebBank offer credit to customers through Dell Preferred Accounts. Use a Dell Preferred Account to finance a computer or other purchases through Dell just as you would at any other retailer. These accounts are available only for personal purchases for home use and require monthly payments. Dell Preferred Account balances also accumulate interest and are subject to a credit limit.

You can apply for a Dell Preferred Account through Dell Financial Services's website or by phone. The process is similar to applying for a store charge account or credit card. According to Dell Financial Services, you can receive a decision almost instantly. You must be of age to apply for a Dell Preferred Account, and doing so authorizes Dell Financial Services to check your creditworthiness through its partner, WebBank. On the application, include your name, address, yearly income, employment status and Social Security number.

Using a Dell Preferred Account lets you pay for your Dell purchases over time, which is helpful if you don't have cash on hand. Dell offers Preferred Account customers special offers on computer purchases, such as no interest for 12 months, in some cases. Dell Financial Services doesn't charge prepayment penalties or a yearly fee. You can pay your balance online or by check.

Dell's financing terms aren't as generous as many bank loans and credit cards. As of the date of publication, Dell charges between about 20 and 30 percent APR on Preferred Account charges, depending on your creditworthiness. The credit limit varies based on your credit history. Dell also charges late payment and returned payment fees of up to $37.

As with any loan or credit card balance, making the minimum required payment each month versus paying off your balance as soon as possible is quite costly. According to Dell Financial Services, it will take 13 years to pay off a $1,000 purchase if you make the minimum payment of $30 a month at 29.99 percent annual percentage rate, or APR. In the end, the principal plus interest will amount to a whopping $3,826.22. Failure to pay on time or defaulting on your line of credit will adversely impact your credit score.