No One to Bail You Out

Consumer Reports Annual Public Awareness Campaign Advises Consumers on Credit Card Debt and Unnecessary Spending

By Stephen Mazeika    

Every year, Consumer Reports has an annual holiday public awareness campaign to warn consumers of the many ways that retailers take advantage of consumers. Yes, it’s true; some of your favorite stores are pocketing a lot of cash in ways you may never have even thought about.

According to the Federal Reserve Board, Americans owe $1 trillion in credit card debt, and 12 million are still in some kind of debt stemming from last year’s holiday purchases. These numbers are truly shocking, and we shouldn’t make it any worse on ourselves.

Gift Cards

Little do many people know, but by buying friends or family gift cards from their favorite stores during the holidays, you may inadvertently be adding to a retail executive’s holiday bonus check. In fact, many of these cards have expiration dates. What do you think happens after that date comes? The retailers pocket the cash, and lots of it.

According to Consumer Report’s research, around $8 billion in gift cards and certificates last year went right back into the retailers’ pockets when recipients didn’t spend them. Lesson learned: that money you spent on a gift card for your loved one might actually be a donation.

Extended Warranties

Another warning that consumers are frequently warned of through Consumer Reports’ various public awareness campaigns both in the past and present is the purchasing of extended warranties. These, like the gift cards, are another way for retailers to sell you into purchasing these guarantees ‘just in case’ something goes wrong with your product.

Recommended Methods to Maximize Your Purchases

When using different methods of payment, there are different things that consumers need to remember.

Cash
Universally known as the safest method of payment, cash is always the best way to pay. Free from the possibility of identity theft and unanimously accepted, this form of payment is obviously worry and debt free. Use is whenever possible.

Debit Cards
Like plastic cash, debit cards are nice as their transactions are immediately recognized. When managed efficiently by the user who is aware at all times of his or her balance, these cards can be as simple to use as they are to swipe. Although they lack the rewards and the fraud protection of credit cards, they are still a great weapon to have in consumers’ arsenals.

Checks
Checks are also a safe method of payment, especially for large purchases. Like debit cards, they immediately withdraw money from a specified checking account. They are a nice thing for consumers to use for their expenses transactions as they lessen the reliance on carrying large amounts of cash or high liability credit cards.

Credit Cards
Offering greater forms of protection against theft and the principal way to establish lending power, credit cards are a great method of payment for large-scale purchases. Although they carry interest rates and fees, credit cards can be an essential asset for consumers to have. Be sure to pay off your balances in full, and check your account statements for mistakes while making purchases this holiday season.