Credit Card Tactics – Avoid these on Black Friday

Gearing up for the start of the holiday season, stores are preparing for the onslaught of the Black Friday shopping masses. One of the Credit Card Tactics taken by retailers is the promotion of store credit cards. Discounts on purchases made when opening a new line of credit and zero interest financing — these are just a few of the favored ways stores lure shoppers into opening up retailer credit cards.

Shoppers who fall for these tactics end up in a jam by the start of the new year. Not only do retailer credit cards lead to lower overall credit scores, as a consumer’s credit score automatically drops by five points with each new store credit card, but there are long-term consequences. Store credit cards typically come with a massive interest rate beyond the attractive zero interest-rate financing promised at the outset. Over time, the amount of interest paid on these cards, ranging from 18 to 30 percent, eats away at any initial savings made from those discounts for opening a new store card.

Consumer spending for the holiday season is set to increase by approximately 5 percent, according to the National Retail Federation, for an estimated $804 spent per consumer. As a result, credit card deals are bound to attract more shoppers this year.

Those in the know, including the credit card comparison company CardHub, are already on the alert. They note that those retailers who market deferred interest rate plans to new cardholders are playing naughty. For instance, if a consumer misses one credit card payment or takes longer than the set period to pay off a debt, he or she will face financing expenses 27 times greater than the originally stated interest rate.

The Consumer Financial Protection Bureau is also on high alert this season. It has sent out warnings to retailers who plan to promise a promotional annual percentage rate or set transactions over a set time frame, as these are unsavory credit card tactics.

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Nikitas Tsoukalis, President

Key Credit Repair

Black Friday – Why Don’t You Buy Nothing

You see it on the news every year: people dash off after Thanksgiving dinner — or, skip it altogether — to wait in epically long lines to vie for the latest gotta-have-it gadgets. Black Friday sales days get bigger every year, with more people turning out to buy, buy, buy.

This usually turns into a hefty credit card bill that you’ll still be paying off after many of the gifts you buy start to collect dust. And, worst of all, surveys of prices show that Black Friday sales are usually not even the lowest prices of the seasons.

As the consumer frenzy approaches, consider a different option — Buy Nothing Day. This is an annual “culture jam” protest originally organized by the folks at consumer awareness group AdBusters. The most basic way to participate is to make a pledge to do no shopping at all on the business shopping day of the year.

But, many people take it much further in kookie and fun ways. Many people share leftovers and good times at Buy Nothing parties throughout the world. Others take a more direct approach and head to the malls, not to shop, but participate in costumed Holiday Shopper Zombie Walks.

If credit card debt has been a problem of yours, Buy Nothing Day could be one answer. By taking one day off, you can kick start a smaller, less spendy Christmas.

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