Most of us are planning drop some serious cash for the holidays and Americans are again looking to squeeze the most value out of every shopping dollar.
That's why the leaked Black Friday ads are being scrutinized now and why some savvy shoppers are reading credit card agreements to see which cards offer price protection, extended warranties, cash back or special holiday deals. We are looking to get maximum bang out of our shopping bucks.
And those looking to separate us from our money know our intentions and create offers — and scams — with that in mind.
1. Gift cards at 'super-low prices'
Gift cards are great stocking stuffers, and people love to receive them. So when you get an email saying you've qualified to buy a $25 card for just $10, it can be tempting. Follow the link, and you'll likely be asked for enough personal information to make an identity thief very, very happy. Resist.
It is possible to get a gift card at a discount. Some merchants offer them at, say, 5 percent to 20 percent off face value, and sometimes you can redeem rewards card points for gift cards. Those are legitimate ways to save. Also, many people resell old gift cards online at a discount.
2. Opening store cards just to get the promotional discount
As you are finishing your purchase transaction, the cashier cheerfully inquires, "Would you like to save 20 percent on your purchases today?" Well, yes, you probably would. The catch is you will need to apply for the store credit card. And you'd like the discount. But would you like the card? The card application will trigger what is called a "hard inquiry" on your credit report, which will result in a small, temporary drop in your score. Also, adding a new card can impact the age of your credit history, a major factor in your credit score. So that discount may carry a cost you had not anticipated and may not be able to afford.
In addition, if you plan to take out a mortgage to buy or refinance a home in the near future, you may want to think twice. Lenders don't want to see that you are adding lines of credit right before you apply.
But if it's a store you patronize regularly and the card — and the timing — are a good fit, a store card can be a fine idea. But read the fine print and think carefully about it before you apply.
3. Zero-percent financing offers from retailers
Being able to finance a purchase without interest is tempting, and 0 percent offers can be useful, but only if you are able to pay for the item in full and within the allotted time. If you feel certain you can do that, it's still a good idea to ask the retailer what the price would be if you paid cash. If the cash price is lower, is the financing really free?
4. Keeping track of purchases in your head
Let's just say come January, almost nobody is pleasantly surprised that they didn't spend nearly as much as they thought. (Besides, you may have seen a deal that was just too good to pass up, and maybe there's still room in the budget but you're just not sure.) Not keeping track also opens up the possibility that with almost no time left, you discover you forgot to buy a gift for someone (hello, gift card display at the grocery store), and your budget goes out the window. Keep receipts and keep a running total.
5. Leaving yourself off the list
When the buy-one, get-one deal tempts you beyond your strength, or you have an utterly human moment of wanting to treat yourself after shopping or cooking for others, go ahead. No need to feel guilty for that (massage, Kona coffee, whatever your particular treat happens to be) — it was accounted for in the budget.
A Simple Checklist to Get Out of Debt