“To join, or not to join?” That certainly is the question when it comes to saving money. Every company would have us believe that by applying for their credit card, joining their rewards program or becoming a member of their club we will save more than we ever dreamed possible. But while that idea may seem too good to be true, there is some truth to it: we may sometimes save money by jumping on the bandwagon. So the question you really need to ask yourself is this: is it worth it to me?
Credit Card Promotional Offers
We’ve all seen an offer along these lines before: “If you apply for our store branded rewards Visa card, you’ll save 15% off your purchase!”. But the answer is simple. Much of the time, signing up for a store credit card on the spot may be a bad idea. A credit card is something to be applied for with thought and care. Most of us don’t really need more than one. And if you’re honest with yourself, you’re not going to stop at the counter and read into the fine print on that credit application, are you? So you won’t know your interest rate, penalty rates, or even if what you’re applying for is just an introductory rate. Plus, the mere act of applying may affect your credit score negatively. My response here is a polite but firm, “No, thank you.”
Loyalty rewards programs and membership cards that don’t cost anything to apply for may be a great way to save money. The important thing is to acquire and use them wisely. If you only shop at a store once a year, do you really want to carry around a membership card for 364 unnecessary days? Does the store offer enough deals on things you buy to make the card and its rewards worthwhile? Periodically reassess the reward card collection in your purse or wallet, and get rid of any you haven’t used in weeks or months.
Discount clubs are the stores that you usually have to pay a fee to join, but they offer very low prices, often by letting you buy in bulk. So let’s think about their business model: when do they make their money? Well, they certainly wouldn’t mind if you paid your membership fee and then didn’t shop often enough to get the return on your investment. But they’re also counting on you to come into their store and end up buying things you don’t really need, for example a box of 400 candy bars, because the price looked “too good to resist”. In a few weeks of shopping like this, you may risk gaining some weight and the remaining 308 candy bars may get thrown out because you’d be sick of the taste by then!
So, before you join at all, make sure you’re saving enough to be worth your while. Make a list of items, groceries for example, that you purchase often and might want to buy in bulk, including the price you usually pay and the size of the package. Then get a visitor pass to the store in question, or go with a member you know, and price compare. If you decide to join, always make a grocery list before you go and stick to it!
Online Money Saving Clubs
Online memberships fall into two categories: those you pay money for and those you don’t.
You can treat the free membership online bargain clubs much like rewards cards at traditional stores: just don’t accumulate so many that they lose their usefulness. Online money saving clubs with a fee are more like discount clubs; you’re responsible for making sure that fee is going to be worth it to you. Depending on the fine print of the membership in question, you may be able to share an online membership with a friend you trust. Just be sure you don’t use the same user name or password for a shared account as the one that’s on your e-mail or bank account, for security reasons.
The most important thing to remember about memberships, discount clubs and rewards programs is that you don’t simply want to jump on the bandwagon because it’s there. The decision to join or not to join is yours to make, thoughtfully, so you can keep your best interests at the forefront.
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- Shopping online: Are you really saving as much as you think?
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Category: Frugal Living