Half of every man, woman and child in America, 166.3 million people, will shop in stores and online between Black Friday and Cyber Monday, according to the National Retail Federation.
That is going to be the largest number since the trade association began tracking these sales in 2017.
While consumers are entering the holiday shopping season with a good amount of pent-up demand this year, they should be cautious with their pocketbooks, The Wall Street Journal reports in “Black Friday Spending Traps: Credit-Card Offers, Tricky Trips and So-So Discounts.”
Inflation Top of Mind
This year especially, with a possible recession looming, shoppers should resist impulse buys and racking up big credit card debt, says Mark Cohen, director of retail studies at Columbia Business School and a former executive at Sears.
“Most reasonable people would say that it’s a good idea not to overindulge, and yet they do,” Cohen says.
This is very important to keep in mind if you are one of the Americans who have racked up higher balances on your credit cards, now costing considerably more in interest rates with the Federal Reserve Bank still raising them. As well, Americans’ savings rates have dropped in 2022—so Americans’ personal finances are not necessarily in the best shape as they enter the holiday shopping season.
Before embarking on your Black Friday shopping spree or going online, realize that inflation has jacked up prices on many goods this year. Travel and food are up higher than the current inflation of 7.7%, while apparel and electronics have not been as impacted.
So, it’s also important to set the bar higher this year—in terms of not being shocked by considerably higher prices, says Jamie Hopkins, a financial adviser with the Carson Group.
“A lot of people are probably running budgets in their mind that don’t align to what things cost this year,” Hopkins says.
Is It Really a ‘Door Buster’ Deal?
The next thing holiday shoppers should do is resist the temptation to get swept up in those celebrated Black Friday and Cyber Monday deals.
In fact, many stores have been offering similar specials and discounts ahead of these dates, Cohen says. “There’s no need to answer the call Friday or feel guilty if you don’t wake up early enough,” he says.
Another rule of thumb—which can apply to consumers year round, not just at the holidays when people get swept up in the joy of gift giving—is to reassess whether the purchase is a good one to make in the first place, says Lindsay Bryan-Podvin, a financial therapist in Ann Arbor, Michigan.
To this point, the financial therapist says it’s a good idea for people to opt out of some of the promotional newsletters and emails they get from retailers.
It's not a deal if it’s something you or a recipient don’t really want or need, Bryan-Podvin reasons.
Resist Store Credit Cards & Special Offers
Finally, and perhaps most importantly, shoppers should resist bids to sign up for a store credit card at the register—unless they are prepared to pay the full balance right away, Hopkins says.
Interest rates on retail cards now average 26.72%, compared to 22.66% on regular credit cards, according to Bankrate.
Leisure and travel companies are also offering specials, but because they may, or may not, include add-ons, they are challenging to compare with one another.
There’s a lot of fine print on such things as travel packages or cruises. Consumers need to consider all of these details, as well as the logistics and practicality of the propositions before signing on.
Plus, most importantly, many are non-refundable.
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