Don’t let these money-saving strategies exact a price from your budget.
7 Ways Trying to Save Money Can Cost You More
You may consider yourself a savvy shopper, always on the lookout for a good deal. You’ve probably saved a lot of money by clipping coupons, shopping sales, matching prices online and other smart ways to get the best price on purchases both small and large.
But did you know that trying to save money can sometimes backfire and end up costing you more?
Click or swipe to find out 7 ways a seemingly good deal can go bad.
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1. Signing up for free trials
From free streaming services to free trials for supplements, teeth whitening and other health or beauty products, free trials can save money – if you remember to cancel before the trial expires.
However, some free trials are hard to cancel, with hidden terms and conditions, pre-checked sign-up boxes online and strict return and cancellation requirements that make it almost impossible to stop deliveries and billing, according to the Federal Trade Commission (FTC).[1]
Before you sign up for a free trial, the FTC recommends researching the company online to see what others say about the company’s free trials and its service.
2. Financing with 0% interest
When you can’t pay cash for large purchases, a 0% interest financing offer for a year or longer can be a smart move. However, if you fail to adhere to the offer terms, you could end up paying more than anticipated.
Read 0% offer terms and conditions carefully, paying special attention to the interest rate that kicks in on any remaining balance after the offer expires. On many 0% offers, paying late or missing a payment may cancel the no-interest terms, subjecting you to a higher interest rate. Also, if you owe a balance when the offer expires, you may have to pay interest retroactively on the original purchase amount.
3. Transferring credit card balances
Transferring credit card or loan balances to a new credit card with an introductory 0% APR for a year or longer can be a wise move when you save more in interest than you pay for the 3% or higher fee on the transferred balance. [2] That’s because payments go directly towards principal, so you won’t pay interest.
If you don’t pay the balance by the time the intro period ends, however, a new, higher interest rate typically kicks in. Carrying a balance with a higher interest rate than the one on the original card may cost more in interest than you’d have paid otherwise, especially if you make purchases on the new card.
4. Abandoning your sales circular shopping mission
When you run into an expensive health food store to grab the advertised head of broccoli for $1, it’s easy to abandon your frugal mission with impulse buys on snacks, pastries and other enticing products.
Before shopping make a list of what you need to buy and take a set amount of cash instead of a credit or debit card to avoid buying more than intended.
5. Buying more online for free shipping
Around 75% of consumers expect free delivery, even on orders under $50, according to a report from the National Retail Federation (NRF). [3] Additionally, 65% of consumers look up shipping costs and free-shipping thresholds before getting to the checkout, according to the NRF.
When you purchase something you need for $25 but then add one or more items to the cart to meet the free shipping requirement, you’re not always getting a good deal. More likely, you’re just spending more money than planned.
6. Buying stuff on sale that you don’t need
Just because it’s a bargain doesn’t mean you need to buy it. It’s hard to pass up a half-price shirt or a pair of pants that are a fraction of the original price. However, if you don’t need the item, you’re spending money on something that may simply hang in the closet until you drag the item out for a thrift-store donation purge.
7. Carrying a rewards credit card balance
If you’ve got a credit card with a high cash back or other rewards program and you pay off the balance each month, you’re saving money on purchases because you get money, miles or other rewards in return.
However, when you don’t pay the balance off each month, you’re canceling out that “free money” by paying interest. Another way to trip yourself up with this savings tool is to charge more purchases than you can pay off that month just to accumulate rewards points or cash back.
This article by Deb Hipp was originally published on Debt.com.
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About the Author
Deb Hipp
Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.
Published by Debt.com, LLC