It’s pretty much inevitable. You are out shopping this time of year at a major retailer, and after your total is announced, you hear this next:
“Would you like to save XX% today by opening a [insert name of store] card?”
I always know when it’s coming. The cashier is smiling sweetly, and hoping you say “sure!”
They are simply doing their job, I get that. They are likely trying to meet a quota, perhaps for a bonus. I always politely say “no thank you” and proceed with my transaction.
Sometimes, they succeed, and I cringe see others getting that instant approval victory. But the promise of saving 10 or 15% is likely an empty one.
Why should you say no?
A recent poll conducted by Consumer Reports found that about 12 million Americans had not paid off the previous year’s holiday shopping bills.
So the fact is, most consumers do not end up paying off their holiday purchases before they get hit with ridiculously high interest rates of 18% or more. In order to avoid any interest fees on a December purchase, the balance would need to be paid in full with the January billing statement.
But what if I pay it off?
I am sure there are some that will. In that case, you did just save the promised amount. But now you have a new line of credit, more mail every month, and the temptation to use that card again.
Retailers seem to be really pushing the instant credit option this year. With money tight for many families, and the lure of all the hottest deals and latest and greatest electronics, they take advantage of the human desire for instant gratification.
I am sure even the most diligent savers and budgeters will be tempted to spend “just a little more” than they planned this year. Especially in this final week, when stores are making their biggest push for those last-minute spenders. Store credit cards and the deals they promise are actually a lure to get you to spend more than you intended.
Just say no.
Shop online if you must, from the comfort of home to avoid that friendly cashier. Go over your gift list and make sure you have not forgotten about any previous purchases. Remember that Christmas is not about the gifts, and where true riches are found.
One less credit card is one more step towards financial freedom.
Disclaimer: I am not a financial expert, I am just a mom who has experienced the pitfalls of instant store credit first-hand. {stepping off my soap box now}
This post is linked to Works for Me Wednesday and Frugal Friday.
Thank you so much for this great reminder. It is SO tempting to “save” a small percentage upfront, but oh-my, the ramifications can be financially crippling when more credit cards, interest, late fees etc get involved.
This holiday season, I’m just saying, “No.” With a smile on my face, of course!
.-= Myra´s last blog ..A Candy Cane Christmas =-.
So true!! I keep seeing this offered on Amazon when I order. It’s tempting when you have an order that would only be pennies after opening the Amazon card, but I never do it. We’ve spent too long getting rid of all of our credit cards! I certainly don’t want to open any more! Thanks for the reminder.
.-= Jennifer´s last blog ..Rite Aid Deals: Week of 12/13 =-.
Oh, Jennifer! I totally forgot about the online temptation, too. You are right about Amazon. I actually shop there so much, I am used to just ignoring it. But I am sure others fall in that trap!
I’ve noticed this year also! It’s crazy. When they asked I’ve just started saying “Credit cards are the devil!” Shuts them right down and they move on with no more questions! And you can tell the other like minded people in line because it always brings a snort! Those that don’t agree are looking at you with their eyes almost popping out of their skulls and looking at you like you’ve grown another head.
You’ve got to have a little fun in life!
I’m hosting a giveaway of a nativity set over at my blog if you are interested. http://autumnaskswhy.blogspot.com/2009/12/how-about-christmas-giveaway.html
.-= autumnesf´s last blog ..How About A Christmas Giveaway? =-.
Hello! I am new here, but I hope you won’t mind if I add another perspective to your post. I am a proud mommy of a 4 year old and a 5 year old. I stay home with them and homeschool them, but I also work part time for a national clothing retailer. I am one of those cashiers who asks if you’d like to save 15% off your purchase by opening our card. (Please don’t hate me yet!) I do wholeheartedly agree with your post. Our economy is in such trouble because we spend what we can’t afford and mostly to get what we don’t really need. Credit cards have played a huge part in that. But also, please understand the retailers perspective as well. Every time someone swipes the credit card of their choice, the retailer pays 3%-6% of that purchase to the credit card company funding that card. When someone uses the retailer’s credit card, they don’t have to pay that fee. When someone is a holder of that retailers credit card, the retailer is hoping that you’ll be further encouraged to be a repeat customer with them. It also allows the retailer to know who their loyal customers are, so they can “roll out the red carpet” for them (in way of discounts and reward programs). So that’s why they push their cards so hard. It’s the company who funds their cards who is hoping that you won’t pay off your balance and pay them interest. The key, like you mentioned, is to pay off your balance every month. Also, it is part of the employees job to talk about and ask about the retailers card. For me, it’s part of what I get paid for and I want to be a good employee. I don’t mind when someone declines opening a card. I totally understand where they’re coming from, but please don’t be rude about it. We receive several rude people who either cut us off in mid sentence or feel it necessary to tell us why credit cards are so bad. A simple “no thank you” is appreciated and I will hopefully please you with the rest of my customer service. : )
Thank you for this post! People have to remember the credit card companies are not FOR you, otherwise they wouldn’t charge interest. They are there to take more of your money. When that cashier asks you that question think about it this way, if she told you to hand over another $10 bucks after your transaction was done would you want to? If the answer was no then why would you pay an extra 10-30% on your purchases?
.-= Amanda´s last blog ..Picture People deal! =-.
Your words are SO TRUE and they cannot be said enough. All the misconceptions about credit cards, and those that get hung up in them, really sadden me. It is so easy to want that instant savings… but most often that instant ‘bonus’ comes with a long-term debt. With more money spent. Ick.
I typically just smile and say “No, thank you. And I appreciate you extending the offer. But it is not going to happen.”
.-= Amy @ MomsToolbox´s last blog ..SOAP: True beauty is in submission =-.
I, too, will be saying “no thanks” to anyone asking me about opening a credit account with them. I know myself far too well and know I cannot be trusted with plastic! 😀
I do have a friend who is FANTASTIC at maximizing store credit cards though. She frequently signs up for store cards (usually to save the % off immediately). She pockets the actual cash for the purchase in an envelope and files it, waiting for the first bill, so she can pay in full. She then cancels the credit account. Her rule is to NEVER make a second purchase with the card, so she really is saving money.
Of course, you have to be pretty together to do this. I know this is not a plan that will work for me. I’m not organized enough and I’m still too much of an impulse shopper! 😀 My best way to save at Christmas is to shop deals all year. I’ve only had to buy two Christmas presents after Thanksgiving this year and they were small! 😀
.-= Bethany´s last blog ..Coupon Round-up! =-.
This is very true, and a trap my mom has fallen into. Please stop by to link this to Thrifty Thursday!
.-= Shelly´s last blog ..Thrifty Thursday =-.
Keep in mind that some stores require employees to meet a credit-card-signup quota or lose their job. Even those of us who are passionate about avoiding credit cards need to display a Christlike attitude towards the cashiers we interact with.
Sarah May,
I totally agree about showing a Christ-like attitude, which is why I mentioned politely declining. It is unfortunate that some employees may lose their jobs over such an issue. I hope that is not the case!
I completely agree with not opening a line of credit like this as an impulse! I do have to say, though, that I have ONE store card that I opened after MUCH thought and calculation of the savings. I’m a young professor who, with my husband, am working toward living debt free (think school loans from putting myself through school to get a Ph.D.). As a professor, I need to dress professionally for work. Every semester, we have budgeted $100 to spend on new clothing/shoes for work. I normally shop at one store for my work clothes…Ann Taylor Loft…relatively inexpensive as far as professional clothing is concerned. I did open up a card with them because of the HUGE savings they offer for card holders, plus the 15% off each purchase for teachers, not to mention the coupons galore and sales that they offer. In August, I went in and purchased $300 worth of clothing for $100!!! Here’s how I’m sure to not get sucked in. I only shop there twice a year and always with my husband…so I can’t fudge on the numbers…plus I love shopping with him 🙂 AND, they allow card holders to make the purchase on the card in one transaction and turn around and pay it off with cash in the next. I get points toward discounts by putting it on the card, but the balance remains at zero. It has allowed me to build a work wardrobe for a fraction of the cost otherwise. I know this doesn’t work for most, but it works for me and allows for huge savings on my clothing. I think the most important part is that my husband, who is also committed to being debt-free, is with me when I purchase so that I’m not tempted. He also knows that he can’t go into a Guitar Center without me…too much temptation for him 😉
Couldn’t agree with you more!!! We’re down to one credit card and it is almost always paid off the next month. That is a hole we don’t want to be in no more…the house debt is enough for us!!!
Great post!!!!
.-= Jes´s last blog ..Waste Less, Give More…Enjoy Your Local Library!!!! =-.