So you’ve gotten a bunch of savings by taking advantage of a mess of Black Friday and Cyber Monday deals? Great! Now do you want to take your savings to the next level?
Unless you’re that baby from the Capital One commercials with Jimmy Fallon who hates saving money, your answer is undoubtedly yes. But you’re also likely confused. Most people assume that nationwide retail holidays with catchy names offer the best, and perhaps only, means of saving on holiday shopping. But that’s not the case. There are a number of other great ways to lessen your wallet’s burden, and they can collectively subsidize more than 50% of your holiday spending budget and thereby prevent a major shopping hangover down the road.
- Grab an initial bonus: Around half of all consumers have excellent credit, and that’s the ticket to a quick hundred bucks this holiday season. Credit card companies are offering attractive rewards bonuses and low-interest financing deals to new customers with lofty credit scores. The best rewards deal currently on the market comes with the Chase Sapphire Preferred Card. You get 40,000 bonus points, redeemable for a $400 statement credit, for spending $3,000 during the first three months. The Sapphire Preferred Card doesn’t charge an annual fee during the first year either, so there’s no reason why that bonus can’t be free money.
- Transfer a balance: The average household has $6,700 in credit card debt, and that number is sure to rise during the coming months. With the average interest rate for someone who has excellent credit at 12.99%, indebted consumers are looking at paying roughly $950 in interest if it takes them two years to become debt free. By transferring what they owe to a free balance transfer credit card like the Slate from Chase, which offers 0% on new purchases for 15 months and doesn’t charge a balance transfer or annual fee, they’d save nearly $850.
- Don’t forget about gift cards: While it might seem difficult to forget about gift cards during the holidays, considering they’re the most popular present and are on nearly 60% of people’s lists, it’s easy to assume that opportunities to save do not extend to them. Gift cards are more similar to a form of currency than a type of goods, after all. Nevertheless, you can save up to 80% by buying discounted gift cards or get up to 95 cents on the dollar when selling unwanted gift cards through an online gift card exchange.
- Leverage one-time discounts: Store credit cards are known for a few things: 1) Being easier to get than traditional credit cards; 2) Only working at the retailers they’re affiliated with; and 3) Offering attractive discounts on purchases made the day of account approval. The JC Penney Card is one offer that fits that description to a tee, as if gives you 20% off apparel, shoes, handbags, and certain jewelry as well as 10% off fine jewelry, watches, and home merchandise the day you get your card. Those discounts can amount to a lot in terms of dollars since JC Penney sells such a wide variety of merchandise.
- Avoid retail financing: It can be tempting to take a retailer up on its offer for 0% financing for 6+ months, but it’s also a mistake. More than 60% of the retailers that offer financing have what are known as deferred interest plans, which waive interest for a certain introductory period yet retroactively assess finance charges if your full balance isn’t paid off before regular rates take effect. Such “gotcha”-type financing can inflate your costs tens of times over.
Ultimately, we could all use a few ways to save on holiday shopping. I mean, the average consumer is expected to spend somewhere around $800 on gifts and other holiday expenses, and the last few years have been marked by significant fourth quarter debt buildups. So, here’s to a more affordable, yet equally joyous holiday season in 2012.
By Odysseas Papadimitriou, CEO of Card Hub, a company that helps match consumers with the best credit cards and gift cards for their needs.