That’s right. Tis the season to be robbed — and not so blindly. “We see it every year — scammers taking advantage of the holiday season to defraud consumers,” John Breyault, director of the National Consumers League’s Fraud Center and Fraud.org website, told USA Today. “From bogus holiday charity scams to dubious websites that offer shoppers can’t miss holiday ‘deals,’ scammers are adept at taking advantage of consumers’ best intentions during the holiday season.”
GoGirl did some research and talked with consumer expert Bethy Hardeman, chief consumer advocate at Credit Karma, on how to steer clear of financial traps this busy holiday season.
1. Look Out for Phony Black Friday Sites or Discounts
Yup, we’re not even at Black Friday yet and you already have to watch out. Cybercrooks get an early start by creating sites to attempt to get your personal info, or they entice you to click on a link that fills your computer with malware to capture it. The best way to prevent this? Don’t click on random links, update your software with anti-virus protection and look for legitimate sales information on BlackFriday.com or DealNews.com.
2. Be Wary of Store Credit Card Discounts and Incentives
Hardeman says you need to fully understand the interest rate and term/conditions before opening a store credit card to get a discount; store cards often carry higher interest rates. Plus, opening multiple store credit cards can lower your credit score — every time you apply for a new card it appears on your credit report.
3. Look Our for Fake Gift Cards
Yes, this still happens. Scammers make third party sites where they sell the cards from the stores but they void them first. To avoid this, only buy gift cards from store counters.
4. Watch Out for Deferred-Interest Credit Cards
Hardeman says if you don’t fully pay off the card by the time the deferred interest period is over, you can be hit with retroactive interest charges on the entire balance charged. Though these cards often say “zero percent interest” or “special financing”, if you leave even a single dollar of charges on the card by the time the deferred interest period is over the costs can be huge.
5. Control Your Spending
One of the bigger — and pretty simple — ones to do. We all get caught up in the excitement of the season and want to be generous — but we can forget about our budgets (especially when we are using credit cards). A 2014 Accenture survey found that most people make a budget for holiday gift buying, and nearly half go right ahead and spend more anyway. Credit makes that so easy to do. Set yourself a budget and bring cash.
6. Avoid the Extended Warranties
Extended warranties allow retailers and vendors to make extra money, but often times don’t provide a strong ROI for the consumer, Hardeman says.
7. Layaway – Just Don’t Do It
Fully understand rates associated with the layaway program, as many have service/cancellation fees tied to them, says Hardeman. For example, Sears charges a $5 service fee for new layaway contracts, and then a $15 cancellation fee if you change your mind.
8. Read Your Bill Carefully
A very simple one to miss. With all the holiday excitement when you finally get your credit card bill you probably just bite the bullet and assume the damage is that bad. But READ IT CAREFULLY. Look for overcharges, charges for items that never arrived, and false charges.