Saving extra money on anything would make any money savvy individual jump for joy. It is a big achievement when you save a boatload of money on a shopping trip. Let’s say it’s a defining moment for a former shopaholic. Yes, I can finally say “former” shopaholic; I have it under control.
I spent my lunch hour on Friday picking up a few items that were in dire need of replacement, and to prepare for my move next year. Yes, ladies and gents, I am very hopeful that I will be out on my own next year. I am almost certain it will be a rent and not a buy – houses are cuckoo for cocoa puffs crazy priced right now in the Toronto area.
How to Save an Extra $62 and Have an Otherwise Awesome Day
The Advantages of Patience in the World of Money
I will say this again, Patience. It’s a Yoda like moment when I actually have the patience to wait for a set of cookware and a duvet to come on sale. I was an extreme shopaholic and would buy regularly on impulse. There are great advantages to having patience when purchasing higher ticket items, you can take time to compare quality, and you have oodles of time to shop around. You could relate it to market research. In the end, that’s exactly what it is. Shopping around lets you determine how the market is working and the best place and time to buy.
I had been eyeing a Jamie Oliver set of cookware for at least six months. Normally, the retail is $699 (highly overpriced) but they often have these sets for 50% off. When you time it right, you can get them for 60-70% off. I was a bit miffed when I missed a one-day sale on these for $199.99, so I made it my mission to get this set for $199 or less and I did just that. Remember – patience!
Your Attitude can make or break the Whole Deal
Be nice and listen.
Sure, this sounds like something Confucius or Deepak Chopra would say, but the nicer you are to the Customer Service staff, the better your chances of being notified of extra savings. The “Ma’am if you sign up for our card today, you can receive an extra 15% off or that would be $62 off your purchase today” got my goose. Sure, I was being sold, but saving more money is music to my ears. On a normal day, most service staff ask the bare minimum, such as: Do you want to sign up for our card. They usually leave it at that and never inform you of how much you’ll actually save. Most consumers immediately say NO.
I made an exception and signed up for a second credit card to save $62. I prefer to stick with one card.
I’ve used this tactic VERY carefully in the past. I sign up for the card for a one off purchase, pay off the bill in full, leave the account open and inactive for six months and then close it. I do still pay attention to the card – the last thing I need is identity theft and someone charging purchases to it.
Why six months?
It takes at least three months for the credit bureau to register it and leaving it open for at least six months will have less of an impact on your credit rating. A year is better.
WARNINGS for using this tactic:
DO NOT do this on a regular basis. Every time you open a credit account of any kind, it dings your credit score.
It’s all about credit utilization.
“Credit utilization is a simple equation and measures how much of your available revolving credit is being used each month. Divide the sum of your account balances by the sum of your account credit limits.
Why does closing a credit card account hurt my score? It hurts your score because your credit utilization will go up, which is bad. If you have two cards with $500 limits and you charge $250 to one and $0 to another, your utilization is 25%. If you keep your spending the same but cancel the second card, your utilization jumps to 50%. To a lender, you’re a risk because you use 50% of your available credit each month.” http://consumerist.com/2009/05/02/understanding-credit-utilization/
“The reality is that cancelling a card can create a short-term dip in your credit score, which in turn can affect your cost of borrowing. So you have to time the cancellation so that either you do your “good” borrowing first, or your credit score has enough time to recover.” http://www.gailvazoxlade.com/articles/smart_credit/close_credit_card.html
Common Sense Moment:
If you’re not going to be able to pay the bill, well dumbass, don’t open it in the first place. The $62 you save up front will be eaten up with the 19.99% interest you pay. Not to mention, just one late payment can mess up your credit history.
According to the credit experts, here’s what you should do:
Keep a variety of types of credit-related accounts open. For example, you might have a major credit card, a store credit card, a mortgage and a home equity line of credit.
Credit cards as a tool http://www.debtfreeforever.ca/sm_articles/credit_cards_as_tool.html
5 Habits of Highly-Effective Credit Card Users http://www.getrichslowly.org/blog/2010/09/28/5-habits-of-highly-effective-credit-card-users/
Roundup of my purchase:
NET SAVINGS on my purchase: $764.70 (includes sale pricing and additional 15% discount for card signup)
TOTAL PURCHASE after savings $401
Items purchased: Duvet, Cookware Set and 2 towels.