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| Credit Answers > Debt-Management-Articles-2008 > Sales Tactics |
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As you strive to save for your debt settlement, most of you have made a commitment to rely on cash instead of credit cards. After you complete your debt negotiation program, you will
probably want to re-establish your credit. As you probably know, credit cards can cause serious financial problems if they are not used properly. Periodically, this column
will discuss a credit card issue and give you tips on responsible credit card use. This month's topic is sales tactics to make you spend more with credit.
Unless you are a business owner, you may not realize that credit card companies charge businesses fees (usually 2% to 4% of the total cost of the sale) to accept credit cards.
This information may make you wonder why retailers would bother with credit cards at all. The answer is easy. Research indicates that consumers spend considerably more when
using credit cards. According to Cardweb Research, consumers spend 212% more when they pay with a credit card. Therefore, stores may use many gimmicks to encourage credit card
spending. Below are some store sales tactics that may persuade you to splurge with a credit card.
Spend at least $7.00 to use your card at a convenience store.
At one time, credit cards were mainly used at department stores or for major purchases like furniture. In today's society, consumers can use a credit card to pay for their
morning paper or have a pizza delivered. According to Convenience Store News, an estimated 45 million Americans are willing to use credit or debit cards for purchases of $5 or
less. Consider using cash for small purchases. If a store requires you to make a minimum purchase amount, you will most likely buy more than you need.
Open an account and save.
Many chain retailers offer a store credit card to their customers. Employees are usually trained to persuade customers to complete a credit card application at the checkout
counter. Sales associates persuade customers by telling them that they can save a certain percentage off of their purchase. Due to technological advances in recent years,
customers will know the outcome of their application in minutes. Applicants usually just need to swipe another major credit card along with entering some other basic information
into a pin pad. If approved, the cashier issues a temporary credit card so the customer can use it until they receive the plastic one in the mail. When it comes time to
re-establish your credit, you may want to think twice about opening up a store account at a register. Checkout lines and retail stores are usually busy and hectic. This type of
environment may cause you to make impulsive decisions. If you really want a credit card from a particular store, it may be best to think about the choice before you make a
snap decision just to save 10 or 20 percent. Keeping a revolving balance on the card can quickly surpass that amount of savings. Don't bother telling the sales associate that
you do not think you will get approved. Many stores will still give you the discount, but the inquiry will appear on your credit report. Too many inquiries may affect your credit
rating.
Buy now and make no payment for three years.
Stores that sell furniture and large appliances are notorious for offering deferred payment sales. Receiving your purchase now and not paying for it for years may seem like
a wonderful option. These sales also promote that there will be "no interest" during the deferment period, which also may sound like a great deal. However, many consumers
fail to read the fine print before signing the paperwork. In most cases, these contracts state that if you wait until after the deferment period to start making payments, you
will be paying the accrued interest from the date of your purchase, which can result in an outrageous amount of money. Before agreeing to this type of contract, be sure that you
can pay off the balance within the deferment period. Consider the fact that your situation may change during this time and you may not be able to make payments as early as you
would like. Also, consider how long it will take to pay off the balance if you simply pay the minimum. If it will take you ten years to pay off a piece of furniture by simply
paying the minimum, consider what it will look like at that time.
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