Hi Reader,
Happy Halloween, y'all! Hope you and yours have a fun one.
My son is off at college and way past the trick-or-treating age, but I have plenty of great memories of Halloweens past.
Like this... one of my favorite pics of my son...
And this... when I shared the screen with a clown that looks like he'll haunt your dreams...
Kinda terrifying, right?
But here's the thing... The scary doesn't stop on Halloween. When the calendar turns to November and thoughts turn to holiday shopping, things can get seriously scary -- and not in that fun Halloween kind of way. We're talking about the kind of scary that hits your wallet hard.
Here are two simple-but-scary mistakes that you need to avoid this holiday shopping season...
Getting a store credit card if you carry a balance
"Do you want to sign up for our credit card and save 15% on this purchase?"
Chances are that you've been asked that question many times over the years, and you'll likely hear it again this year, too.
It can be tempting, right? Who doesn't want to save 15%, especially during the holidays?
The problem, however, is that store credit card interest rates are crazy high, even by credit card standards. Last year, LendingTree found that the average rate on a new store credit card was almost 30%. Our new report isn't quite out yet for this year, but -- spoiler alert -- I can tell you that rates are even higher in 2024.
That means that unless you're 10,000% certain that you can pay your balance off each month, you shouldn't get a store credit card. Those rates are so high that they'll easily outweigh any discounts or rewards you can receive.
After all, that 15% discount doesn't look so great if you have to pay 30% in interest to get it, does it?
Failing to pay off "special financing" in time
Stores love, love, love to promote their so-called special financing deals, and consumers love taking advantage of them.
It is easy to see why. Being able to avoid paying interest on a big purchase for 6, 12 or sometimes even 24 months is a big, big deal. It can make an expensive purchase a realistic possibility.
But it is so important that you know that there is often a catch found in the fine print -- and what you don't know can cost you in a major way.
Here's the catch... In many cases, if you don't pay off your purchase in full during that 0% period, you'll get hit with a bill for all the interest that you would've accrued going all the way back to the day you made the purchase. It is called deferred interest, and it means that those 0% offers may not end up being 0% deals after all.
Yes, you read that right.
And you wouldn't just be paying interest on the remaining balance. Even if you paid all but $1 of a purchase, you'd still be hit with that retroactive interest bill dating back to the purchase date. That may not be a big deal with a relatively small purchase, but the bigger the buy, the bigger the potential hit to your wallet.
Unless you're certain that you can pay the purchase off during the 0% introductory period, you may be better off using other ways to pay for that purchase.
A major publication recommended my book!
I'm so excited to announce that Kiplinger -- one of the longest-running, most-respected publications in personal finance -- included me in their list of "some of the best money and personal finance books you can find on Amazon."
I'm included alongside some absolutely iconic personal finance books, and I feel so honored.
Check out the list. You'll be glad you did.
Join me Saturday for a virtual book tour stop!
This Saturday, November 2, at 11:30 am Central (12:30 pm Eastern), I'll be at Black Pearl Books here in Austin for the latest stop on my book tour.
Black Barn Financial, led by my friend and former colleague Sara, is hosting me as part of their book club series. I'll be sharing tips from my book, "Ask Questions, Save Money, Make More," but you don't have to be in Austin to attend.
RSVP at this link and we'll send you a Zoom link so you can join in the fun.
Until next time!
Matt