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Financial Literacy: Credit Cards and Holiday Shopping

According to U.S. News and World Report, holiday shopping tests your financial literacy. Don’t let the desire to get just the right thing for someone you care about blind you to how retailers and credit card companies find ways to make more money or to how you can save on your purchases.

Black Friday Bargains? Whether you monitor things yourself or you use apps that track prices, make sure you are getting the best price for big-ticket items. The article notes that last year, WalletHub research indicated “…about 17 percent of items were actually more expensive on Black Friday 2016 than they were the week before on” And some Black Friday sales are repeats from previous years.

Use Credit Wisely. There are credit cards that will return to you the difference between what you paid for an item and a price-drop, if you have saved your receipt. This is one way to pay less for items that may be hyped as Black Friday or Cyber Monday bargains and turn out not to be such a great bargain.

When you pay with cash or use credit cards, you are paying immediately and that is good, especially of you tend to get carried away using credit. However, if you can use credit in a measured way, you may benefit more from using a credit card with a good rewards program.

U.S. News and World Report also points out something worth considering if you use credit wisely:

“…credit card-using households receive a subsidy of about $240 per year from cash payers, according to a 2010 study by the Federal Reserve Bank of Boston. Prices for goods don’t go up for card-based payments, you see, which means cash users help foot the bill for credit card payment processing and rewards programs without enjoying any of the perks.”

Catching a good sale is great but increasing your financial literacy can mean more money in your pocket when you know how to shop wisely.