When it comes to your money, businesses offering services or goods are trying to get their hands on it, and they’ll resort to pretty ingenious marketing methods to make it happen. And the truth is, they’re not just trying to sell you what you need, they’re also working their darnedest to convince you to buy what you don’t need, all the while assuring you you’re getting a “deal.”
I don’t know about you, but the idea of stocking my home with useless junk and draining my wallet in the process doesn’t exactly strike me as a “deal.” If you’re of the same mind, read on.
To combat the multitude of “special offers,” “money-saving service bundles,” “no-interest financing plans” and the myriad of other such money-grabbing gimmicks, it’s important to remember that savvy spenders just say no to money traps and sales gimmicks. To do that, let’s have a look at three of the most common types of so-called “deals” service companies and retail stores will offer in the hopes of roping you in and essentially tricking you into spending more than you ever intended.
1. Interest-free financing.
This is a common one when it comes to purchasing big-ticket items such as furniture and mattresses. The way it works is stores will lure you with promises of months or even years of no interest payments, often times paired with no payments at all during the same time frame. I get it, it sounds amazing, but trust me, if ever there were a deal that sounded too good to be true, this is it.
The catch to this deal, and what many people don’t understand, is if you don’t pay off the entire balance within the allotted grace period, you will likely be charged interest on the whole of the item’s purchase price even if you’ve paid off some of it.
For example, say you buy a sofa for $2,000 with a deal of no payments or interest for one year. You play it smart and pay off all but $100 of the total during that year. You figure paying interest on $100 will be no big deal, right? Wrong. Chances are, once your grace period expires, if there is any balance left the company will charge you interest on the total purchase price of the item, not how much you still owe. It’s a terrible deal and one that catches many people unawares. Don’t be one of those people. My advice? If you can’t pay cash, hold off on your purchase. And if you absolutely must finance the item, make it a priority to pay off your item in full within the grace period.
2. Bundling services and/or goods.
This is a common sales technique with phone, cable and Internet providers and fast-food restaurants. We all know the drill. We find ourselves in need of a new cell phone service company and make a call to check out rates from a competitor. We hear all the details and make our decision on our new plan. We think we’re rounding the finish line, but just as we’re about to seal our new deal we’re asked if we’d like to bundle our wireless and cable plans into the new cell phone service we just agreed on. Soon your head’s awash in words like “monthly savings” and “much better deal.” What’s the catch here? When you buy “bundles,” you’re often paying for things you don’t necessarily need.
Fast-food restaurants do the same thing. They offer “value meals,” which usually include a main item with a side dish and a drink. But what if you only want the main entrée item or just the side? Is it more expensive to buy it separate or should you just opt for the full meal? Certainly prices vary from place to place, but I can guarantee the stores’ marketing masterminds aren’t banking on you doing the math while you’re standing in line starving.
Instead, they offer up the economical-sounding value meal, which, even if it’s not a better deal it certainly sounds like one and eliminates the need for you to mentally compute your total when you only want to satisfy your urge for a cheeseburger.
The fix? Do the math and check out the individual prices for what’s included in the value meal, especially if you don’t the entire thing. It’ll likely help you keep your wallet fat and your waistline trim, and who doesn’t want that?
3. Buy-one-get-one-free deals, super sales, and other marketing gimmicks.
These are some of the oldest tricks in the book and many of us still fall for these shams every today. While it’s true that many stores offer genuine deals, particularly when they’re trying to clear out-of-season stock, you still should practice vigilance when shopping sales.
A way to do this is be somewhat familiar with regular prices of items, that way you’ll know if something has been marked up before the store employees slapped a “Buy One Get One Free” or “Two for One” sign on it.
It’s also smart to be wary of items that require purchase limits or stores that only offer discounts when you buy in bulk. Again, knowing the general price of such items will help you when deciding how to make your purchases.
Another good rule of thumb when you find yourself tempted to buy unintended items only because they’re part of a deal or bargain buy is to evaluate what your real needs are. Will you use this item in the next month or is it something you’d been saving for but hadn’t yet been able to afford? If it doesn’t meet one or both of these criteria it might be best to move on.
Here at American Credit Foundation, we understand how easy it is to fall for smart marketing techniques, resulting in overspending. If you find yourself in over your head, drop us a line. We have many stress-free options and plans for money management and debt repayment.
