MADELEINE BRAND, host:
Back now with DAY TO DAY.
There may be no such thing as a free lunch but is there such a thing as a free vacation? Maybe you've received these kinds of pitches before. Congratulations. You've won free accommodations for the weekend at a sun-filled vacation spot. There is a catch. You have to sit through a 90-minute presentation, should you go. Here to discuss these free promotional offers is DAY TO DAY's personal finance contributor Michelle Singletary.
MICHELLE SINGLETARY: Hi.
BRAND: Well, what's behind this "free" holiday offers? And I put free in quotation marks.
SINGLETARY: That's right. Anybody who's ever gone anywhere, Podunk whatever, has probably got one of these. And typically, it's for a timeshare.
SINGLETARY: You have to sit through a 90-minute presentation to hear about the resort or the hotel or the beach, oceanfront, whatever, because they want you to buy into this vacation spot.
BRAND: So that doesn't seem like so onerous - 90 minutes. And then free vacation. Sounds like a good deal.
SINGLETARY: Well, I've been to several and that 90 minutes can turn into half a day, and sometimes a whole day if you are not able to say no. And lots of folks are pressured into buying these when they really can't afford them, or they don't understand all it means to be a timeshare owner.
BRAND: So there may be some hidden catches but, overall, are timeshares a good investment?
SINGLETARY: Well, it's interesting you used the word investment. If anybody uses that word during your presentation that this is a good investment, you need to pack your things up and walk out right away, even if it means giving up your free weekend, because that is probably a fraudulent pitch. Timeshares are not an investment. You're not going to make any money on these things. I can pretty much say that flat out.
Now, in interest of full disclosure, I have some timeshares. But I also have a large family. We are a family of five. And when we vacation, we'd have to get two or three hotel rooms. So they have worked out for me. But they're not appropriate for everyone because, in a sense, you are pre-paying for your vacations for years to come. And if you're not in the financial position to do that, I just wouldn't do it.
There's a Web site that I would suggest people go to - Timeshare Users Group. It's at tug2 - that's T-U-G-2.net, has a lot of good information if this is something that you want to do.
BRAND: Let's say you know that you're absolutely not going to invest in one of these timeshares, is it still ethical for you to take the free vacation?
SINGLETARY: Absolutely. If you follow the rules, and it says, you know, it come stay for free, all you have to do is sit through a 90-minute presentation, then it is very ethical because you're following the rules. They say you don't have to buy to come. My husband and I did that once. I was, like, your 90 minutes is up buddy. Can I have my tickets? And they were so mad.
BRAND: I bet they were afraid you're going to start an insurrection. They would all get up.
SINGLETARY: The very first one we went to, it was horrible. And we stayed there for so many hours and this guy was trying to sell us this thing that was so terrible. And the interest rate - he tried to hide the interest rate. It was - oh, horrible.
SINGLETARY: Yeah. And they promised us a boat. It was a rubber raft.
(Soundbite of laughter)
SINGLETARY: I mean, it was too funny. It was really horrible. My husband was so mad because he wants a boat.
BRAND: Well, he got one.
SINGLETARY: He got one.
(Soundbite of laughter)
BRAND: Michelle Singletary is DAY TO DAY's personal finance contributor. She writes the nationally syndicated column, "The Color of Money."
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