March 18th, 2013

8 Shopping Mistakes that Cause Serious Money Woes

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shopping money woes

We all know not to grocery shop when we’re hungry, and we all know not to visit retailers selling handbags for more than our mortgage payments. However, there are several shopping mistakes that aren’t as easy to identify. Read on for a roundup of common errors and how to avoid them.

You open store cards for savings.

Many shoppers are tempted by the store card sales pitch, with instant savings upwards of 20 percent making it seem like a smart move. However, the hard inquiry associated with opening a store card dings your credit score. Additionally, having a wallet full of credit and store cards can lead to mismanagement of payments and will likely result in more debt with mounting interest and late fees. If you’re looking for a new card, read reviews and stick to one or two that offer cash back or travel rewards. Meanwhile, search for coupons and shop sale racks to help you save at stores.

You’re unaware of dynamic pricing.

Dynamic pricing is the term associated with daily — even hourly — price fluctuation of the same product by the same retailer. NPR’s Marketplace highlights a great example of this retail strategy, when a popular DVD set was priced at $100 in October, $70 before Black Friday, and $134 after Black Friday. Ultimately, comparing prices on items is essential for savings, especially for items with high markups. Ink cartridges (a product known for extreme markups), for example, can be easily compared using, where you can find prices for both OEM (original equipment manufactured) and remanufactured cartridges.

You are a compulsive “spaver.”

Buying something because it’s on sale is a waste of money, even if you’re paying less than the original cost for it. Referred to as “spaving,” or spending money to save, this impulse is a surefire way to sabotage your budget. If you weren’t intending to buy something and find yourself considering it anyway, make sure it’s for the right reasons and not simply because it’s on sale.

You assume you can’t return used or open items.

Dissatisfaction with a product is especially disappointing when you can’t return it. Unfortunately, most people assume that the moment they open and use a product, it cannot be returned. This is not always the case, however, even with personal items like cosmetics. CVS offers a 100% customer satisfaction on CVS-brand items and beauty products, enabling you to return that opened eyeshadow that you didn’t enjoy. Additionally, electronics stores offer open-box products to recoup the loss associated with a used-and-returned item. Ultimately, you should review return policies and chat with customer service reps about an unsatisfying purchase.

You are dialed into your smartphone 24/7.

Mobile devices spur us to spend more… and you may be surprised to learn just how much more. According to the American Institute of CPAs, smartphone users spend an average of $204 a month on apps and downloads alone. This doesn’t include all those impulse buys made by the tap of a finger that are ultimately promoted by email offers received directly on our phones. To keep your smartphone a useful tool and not a bad habit, delete your payment history information from the eRetailers you often browse. Opt for free apps and games and stream music for free via Pandora.

You’re a daily deal fiend.

Daily deals are a great way to get away, try new restaurants or indulge in a spa service for a low price. However, these discount vouchers— like those from Groupon or Bloomspot, for example— aren’t considered to be gift certificates and aren’t protected under the same consumer laws. Ultimately, these deals carry strict expiration dates and making careless purchase decisions will result in a stack of expired offers. Since these vouchers retain the value you paid no matter the expiry date, don’t just throw them away. You can also sell them at before they expire to get some cash back.

You go to the grocery store several times per week.

Did you know impulse purchases make up 50 percent of the average grocery bill? If you’re headed to the store multiple times per week, those impulse buys can really add up. Limit the number of times you visit the grocery store by creating a detailed plan of what you will eat and cook each week. If this isn’t feasible, determine how much you’re going to spend during your next trip and shop with cash. Doing so will impede your ability to pick up those unnecessary extras.

You buy beyond your means.

Recent payroll tax changes mean you may not be bringing home as much cash as you used to. If you’re continuing with the same shopping and spending habits, you may need to review and adjust your budget to meet these changes. You don’t want to spend beyond your means and find yourself in a deep financial hole after it’s too late to catch up.



Andrea Woroch is a consumer- and money-saving expert who is passionate about helping people learn how to live on less without drastically changing their lifestyle. She travels across the country sharing smart shopping tips and personal finance advise with media and has worked with top news outlets such as NBC’s Today, New York Times, Dr. Oz, Kiplinger Personal Finance, CNN and many more.

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Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. Your article has a mistake smartphone users do not spend $204 a month on downloads and apps alone, that would be insane.

    “adults found that Americans who subscribe to digital services spend an average of $166 each month for cable TV, home Internet access, mobile phone service and digital subscriptions, like satellite radio and streaming video—the equivalent of 17 percent of their monthly rent or mortgage payment. Those who download songs, apps and other products spend an additional $38 per month, on average.”

    $166 include cable tv, home internet and mobile phone service, they spend an average of $38 on their smartphone apps and downloads, not $204.

    John at 11:25 am on March 18, 2013
  2. There are several facts regarding credit scores and how the system including the data used to determine your FICO Score is nothing less than an inaccurate scam. The system has been broken for decades and the consumer has never been more vulnerable to predatory banks and credit card processors. Based upon the recommendations of the “best” credit cards, there are many additional factors that “should” be reported, however, this is obviously NOT an independent web site. My guess is that it is owned and operated by the very banks that misrepresent what is now a 13 billion dollar industry.
    Here are a few myths regarding credit: When you see the sign that advertises 18 months “same as cash”, think twice before you take the bait.
    #1 The credit card processor for that retailer will report the total balance due AND report the interest rate at whatever the cards regular rate, usually 19.99% – 24.00%. All banks after 2008 began limiting their exposure by drastically lowering credit limits. Therefore that nice furniture you purchased at $$1250.00 with a credit limit of $1500.00 will raise your utilization rate to 85-90%
    While you have divided the $1250 into 18 equal payments at 0% interest, it appears on your credit report that you are only paying $100 per month on a revolving account at 22% interest. There is NO indication that you are taking advantage of credit by paying no interest. It is good cash management, yet is NOT reported as such. Why? Because the creditor is not required to report what is now referred to as “deferred” interest and the processor is counting on the consumer missing a payment, paying it a few days late, or not sending the required minimum payment. This allows the processor to immediately charge a “late” fee, normally around $22-$25 and that zero interest is now forfeited, the amount indicated as the deferred balance automatically is added to the promotional balance and all the sudden, you now have a $1500 balance at 24% interest.
    If you do take advantage of a promotion such as described above, make sure you set up automatic payments on the vendor’s web site to prevent an unintentional missed or late payment. While it won’t change the multiple negative indicators on your credit report, you’ll at least preserve your original promotional rate of 0%.
    Also, be aware that some of the largest processors are still crediting your payment to the lowest APR balance. In other words, I would not advise making a regular purchase on that card until the promotion is over. It is impossible to pay it off. I have plenty of actual proof of how this method is used to attempt to capture interest on the “regular or non-promotional” balance. Regardless of the amount you pay on the account, 90% will be applied to the promotional balance with 0% interest, and as little as 10% applied to the regular balance. Capital One clearly discloses their methodology used to apply both minimum payments and any amounts in addition to the minimum amount.
    Best Advice: Don’t purchase any merchandise during the promotional period.
    NOTE: While the Credit Card Act was designed to eliminate this practice, it has NOT yet been fully implemented and the credit card processor is not yet legally bound to this law. While I could disclose which processors have complied, it would be more beneficial to the consumer if this site actually reported the caveats to promotional purchases and their negative effect on your credit score.
    FINALLY: Do not assume that paying your credit card IN FULL each month will indicate to creditors that you do NOT carry a balance. Whatever your credit card balance is on the statement ending date is the amount reported to the credit bureaus as your outstanding balance. This can also factor into the mysterious algorithm utilized to determine your credit score. Especially your credit utilization.
    In closing: My daughter does NOT have a credit card, is 23 years old and has an Excellent FICO Score. Obviously, what is reported as the factors used to determine your FICO Score are simply speculation. And don’t expect for anything to change anytime soon. Congress receives hundreds of millions of dollars from this very profitable industry. As most intelligent citizens learned when the President railed against Wall Street banks, yet received tens of millions toward his re-election campaign. As did the other candidate. The issue is unrelated to who is in the White House or who is in Congress. I spent 27 years in this industry and credit scores being low provide the creditor an excuse to charge the consumer a higher rate of interest. Which represent billions in loans to people who do not represent a risk to the creditor, however, their score will not reflect their actual credit worthiness; it was never designed to.
    My goal is to have one emergency credit card and never use it. Pay by cash as often as possible.
    Good luck!
    R Guyer, AAP, CTP

    Richard Guyer at 11:16 pm on March 26, 2013

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