What "deals" do people cash into that don't actually save them money?

Every time you enter the world wide web or a store, you’re bombarded with deals that help you save lots of money. Some of these supposedly ‘life changing offers’ may seem promising, but they hurt your wallet in the long run.

So, how can you spot these deals that break your bank in the long run?

A week ago, I was chatting with my friend, who happens to be a senior consumer advocate. She told me about a few deals that exhaust your savings instead of increasing them.

1. Clearing sales

Did you see that ‘70 percent off’ label in the clearance rack of the mall? Have you already started walking to that rack? Wait! Please think for a second. Do you need all those tank tops in that rack? The chances are high that you already have many tank tops at home and don’t need anymore. Plus, these cheap tank tops are not well stitched. Eventually, you’ll end up having clogged closets with tops you can’t use for a long time. You would spend more money on repairing the clothes in the long run.

If you really have to spend more money on clothes, then wouldn’t it be best to buy the ones that are expensive and well made? Granted, you would have to spend $150 on a garment, but that would last for years. Moreover, whenever you go to buy an expensive garment, you would do either of the 2 things:

• You would buy a garment that is genuinely good
• You would not buy the garment at all

2. Cash advances

These are really bad deals since you’ll pay in the long run. Yes, it’s true that the concept of free cash is alluring. However, you’ll eventually pay a larger amount than the cash value if you charge your credit card for cash. This is mainly because there’s no grace period for cash advances.

Do you realize what this means? Interests begin to accrue right from the day you take out the money. Remember, banks consider cash advance risky, so they charge higher interests for a cash advance. So, it’s best to avoid this as much as possible.

3. Special deals

You have grabbed these deals several times before. These deals are the ones where you can save $1 on a 6 pack of soda. The deal looks good since you can save a dollar on soda. But, you don’t realize that most probably you’d have to spend more due to unit pricing.

For instance, the actual cost of the 6 pack of soda is $6. This means the price of each can of soda is $1. When you get a discount of $1, it means you’re paying $0.83 for each can of soda. Now calculate the amount you’ve to pay for a full-price 24 pack. For example, if you have to pay $18 for a 24 pack of soda, then each can is costing you $0.75. This is less expensive than the deal you’re getting on the 6 pack of soda. Moreover, you’re getting much more soda.

4. Multi-pack meals

Love to gobble ready-to-eat meals? Believe that these are great deals since you can save both time and money? Well, ready-to-eat snacks seem to be a great deal but they are not healthy. In fact, it’s better to not eat them regularly. Moreover, have you ever wondered how much you could have saved by purchasing the raw materials from the market and then cooking healthy meals? Processed foods are neither good for budget nor your wallet.. So, avoid them as much as possible.

Read more - Nutrition made budget-friendly: Healthy food that appreciates wealth

Some of my friends have loads of store credit cards in their kitty. Much to my distaste, they always ask me to register for these cards. The APR on store credit cards varies between 23 and 29 percent. Why should I pay such a high-interest rate for getting a discount on clothes? And in most cases, I would probably qualify for a discount after buying a huge number of clothes. This is a sheer disaster. First, I’m buying too many clothes (that is completely unnecessary). Plus, I have to pay huge interest rates. Technically, I’m paying more in the long run.

Most of these retail cards come with lower credit limits. This makes it difficult to maintain a good credit score too.