Buying a cat or dog with a loan at 150% interest

NEWS AND COMMENT: MONTGOMERY COUNTY, PENNSYLVANIA, USA: It is sad to learn that people in Montgomery County, Pennsylvania (and elsewhere) sometimes buy cats and dogs with a high interest loan. I can understand why. They want to adopt a cat or dog and they want that animal to be purebred and good-looking. But the problem is they want it now – immediately. That’s why they can’t wait to save the money to avoid a high interest loan.

Prohibiting the purchase of cats and dogs using high interest loans

Prohibiting the purchase of cats and dogs using high interest loans. Image: MikeB.

And when you adopt a cat or dog it is far better to take your time in any case. This way you make sure that you do the right thing. You make sure that you work out your finances and how much it costs to maintain a cat or dog. You can learn about cat and dog behaviour. During this time, you can save money. If possible, I’d recommend giving yourself a couple of years to build up to it and then diving with hard cash rather than being a victim of an exploitative high interest loan in the region of 150% interest.

My personal viewpoint is an introduction to a story coming out of Montgomery County’s legislature in which Rep. Tracy Pennycuick, R-Montgomery has sponsored House Bill 2311 to amend Title 12 of the state Commerce and Trade laws. The amendment prohibits financing the purchase of a cat or dog with a loan. I think the law is a very good one.

She has seen issues with people purchasing companion animals in this way. And she says that some pet stores and online sellers push financing on people who can’t afford to buy a companion animal outright with their cash. Comment: I guess the pet stores take a commission when they do this. They act as an agent, third party in a transaction between the finance company and the customer. In effect, it is the finance company who sells the cat and dog to the customer.

She said that:

“One Monroeville pet store customer told the Better Business Bureau that she unknowingly signed up for financing with a 151% interest rate and will end up paying $6,055.40 for a $1,888.31 puppy.”

Illinois passed a law in September which also prevented taking out high interest loans to purchase cats and dogs. It is called Holmes Law. It amended the Sales Finance Agency Act of Illinois which prevents a “sales finance agency” entering into a retail instalment contract or make a loan for the purchase of a canine or feline. The words come from the Illinois General Assembly.

The law, as you can see, is named after Senator Linda Holmes who sponsored the legislation. She said that customers of one Illinois pet outlet complained because the interest rates were at 188%. Linda Holmes describes this as a predatory lending interest rate.

It’s worse than that because some of these animals come from puppy and kitten mills; unscrupulous breeding establishments where the animals’ welfare is secondary to the production line of pets. And so, the customer ends up with a big debt and a very sick companion animal. They have to fork out high veterinary bills to keep the animal alive because by then they’ve become emotionally attached. It’s a double whammy. It’s a nightmare.

In Montgomery County, Pennycuick said that there are at least 20 pet stores in the state of Pennsylvania and several online brokers which sell puppies to Pennsylvania customers using third-party high interest financing businesses. If people want to purchase a cat or dog on credit, they should use credit cards and this legislation does not prevent that happening.

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Michael Broad

Hi, I'm a 74-year-old retired solicitor (attorney in the US). Before qualifying I worked in many jobs including professional photography. I love nature, cats and all animals. I am concerned about their welfare. If you want to read more click here.

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