Tis the season for holiday shopping and credit offers

It is literally happening within hours. The official holiday shopping season floodgates are about to open. Whether it’s 9 p.m. or midnight on Thanksgiving night, the bargain hunting Black Friday (er, Black Thursday?) faithful will be hitting retail outlets far and wide for this year’s hottest find at the right price. Let the Christmas shopping begin!

Christmas shopping should be considered an Olympic sport. Bargain hunting isn’t easy. There’s a lot of physical and mental preparation going into it. And it can leave you emotionally drained. You have to dodge other shoppers, be careful and mindful you don’t run anyone over with your cart (or that they nail you). You have to carry, lift, push, grab, stand in line, walk, load the car, unload the car, and finally wrap. It’s tiring just thinking about it. As fun as it can be, it can also be dangerous in many ways. Each year many shoppers or retail employees are injured or worse because some shoppers take the spirit of “Black Friday” bargain shopping to the extreme. We encourage you to keep in mind no bargain is worth someone getting hurt.

Despite the physical exhaustion from the thrill of the hunt, Black Friday can also be dangerous to your wallet and your budget.  You’re going to be inundated with on the spot discounts at the register. In case you’re a Black Friday rookie, they go like this, “Will that be on your ABC Card?” or “Do you have an ABC Card? Would you like one? You can save 15% today just for applying.”

When you hear those words, think twice. Unless you already have the store card and consistently pay it in full each month, say no thank you and use cash, or VISA debit card or a major credit card that offers rewards such as annual cash-back rebates based on purchasing.

Store cards are not necessarily the bargain the sound like. Sure, you get 15% off that purchase immediately, but if you don’t pay off that balance when the statement comes, you may be in for big surprise. Suddenly that discounted purchase is costing you anywhere from 18% to 22% or more in interest because you now have a balance on your card. Just dare to make one late payment.  Add in a few late fees or over limit fees at $15 or $30 a pop and you’ll be suffering from the not-s0-much-of -a-bargain blues. Do the math. It doesn’t seem to add up quite right, does it?

Let’s say you take advantage of one or more store credit cards this season. Not only do you have your discounted purchases, but you also just made yourself more bills to pay. Remember every time you apply for a new card, your credit report is reviewed. Yes, you can apply for all of these cards and pay them off after the holidays. But, the fact remains that for every single card you just opened to save a few dollars, the credit bureaus have been tapped. Multiple credit requests within a short period of time can have an adverse affect on your credit later and your ability to be approved for a better rate loan for a car or home.

Remember most store cards don’t offer additional perks other than a monthly billing statement and an occasional bonus discount for being a preferred shopper. For a better bang for your buck consider the following:

  1. Use a Visa debit card – it’s like shopping with cash without carrying the cash. You debit your checking account. It keeps your budget in check. We offer a Visa debit card with a monthly cash-back rebate. It’s a great way to earn a few extra dollars each month.
  2. Use a re-loadable prepaid Visa card – This is another great tool to keep your shopping budget on track. You load money on your card and can only spend what’s available.
  3. Use a credit card that offers rewards. Whether it’s cash-back rebates based on annual purchasing or reward points for travel and merchandise, this may be a better option for you. And your interest rate and other fees may be a lot lower than store cards.
  4. Open a holiday savings club account. Plan ahead for your shopping. Even if you only save a few hundred dollars, that’s a few hundred dollars more going into the holiday shopping season compared to starting with zero dollars.
  5. Use lay-away. Many retailers are going back to providing this shopping service. It’s convenient and easy.
  6. Check out online bargains. Many times you can get free shipping this time of year. That could mean saving money on gas.

Our point is, be a smart holiday shopper. Be wary of on-the-spot discount offers. Read and understand the fine print – that’s where you’re going to find out all about those hidden surprises that show up later on your monthly billing statements.

Have fun shopping. Happy Thanksgiving from all of us at Members 1st Federal Credit Union.

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