Article by Anisha Sekar – Market Watch.com
Older Americans are disproportionately likely to be in debt. A 2012 Demos survey found that citizens 65 and older typically carried $9,300 on their credit cards, the most of any age group. Debt burdens are increasing, too. According to the Urban Institute, 43% of seniors had some debt in 2010, compared with 30% in 1990. Stock market rally notwithstanding, debt burdens continue to rise for many older Americans.
Unfortunately, the holiday season — between travel and buying gifts for the family — often only exacerbates these difficulties. A recent NerdWallet study found that 28% of consumers over 60 said that they don’t bargain-hunt for their holiday purchases, preferring convenience over savings. Further, they were the least likely to brave the Black Friday crowds. Only 6% said they would do the bulk of their shopping on Thanksgiving weekend, compared with 11% of those aged 45-60 and a full 16% of those aged 30-44. Forgoing lower prices for convenience can be costly in the season of hectic crowds and deep discounts, but it doesn’t have to be. Here are five tips for dodging debt on Black Friday, without braving a crowd of angry deal-hunters.
1. Take advantage of price match
If you have a Citibank credit card, you can use their Price Rewind feature to get Black Friday prices before you’ve sat down to turkey dinner. Simply make the full purchase on your Citicard, register the purchase with Price Rewind, and submit a dated copy of the ad with the lower price. Keep in mind that the minimum claim per item is $25, and the maximum is $250. MasterCard and Discover cards also have price-protection programs. While some exclusions apply (jewelry isn’t covered, for one), this is a good way to get deals on electronics, appliances and more while still enjoying Thanksgiving dinner.
2. Avoid layaway programs
While layaway programs have lightened up on their fees in the past few years, most of them have one major caveat: if you end up not making the purchase, you have to pay a cancellation fee. Wal-Mart, for example, levies a $10 charge if you don’t pick up the item and pay in full by December 13th. If you need help saving up, you’re better off with a Christmas savings account at a credit union. That way, if circumstances change and you can’t afford the item (or if you simply change your mind), you aren’t wasting money.
3. Search for low-effort discounts
Getting a deal doesn’t necessarily mean door-buster sales or mashed potatoes eaten in line at Target. Most credit cards grant access to an online rewards mall like ShopDiscover or Chase Ultimate Rewards, where you can get up to 20% cash back on major online retailers simply by clicking through the website. For example, Chase gives 5% cash back at Macy’s, and ShopDiscover offers 15% back on North Face purchases. Even if you don’t have a credit card, cash-back websites like ShopAtHome.com and Upromise can earn similar discounts.
4. If debt-free isn’t an option, minimize the cost
Finally if you find yourself unable to make ends meet for whatever reason, try to keep your interest payments as low as possible. Your best bet is probably a 0% interest credit card that offers 15 to 18 months of breathing room before you start incurring finance charges. Alternatively, a secured loan, like a home equity line of credit, is a viable option if you’re sure you can pay it off. Try to avoid putting the purchases on credit cards that charge interest, because those rates are typically the highest.