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On November 25, retailers will be offering discounts in a major sale ahead of the festive season.
The hype around Black Friday, and the occasional good deal, has consumers all excited and ready to spend. But buying up “deals” on Black Friday may cost you more than you realise.
According to research by credit bureau TransUnion Africa, Black Friday is one of the more dangerous times of the year for poor credit behaviour, as consumers don’t think carefully about their purchases before swiping.
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According to the data on new accounts opened during the week of Black Friday, TransUnion found that people were more likely to take out loans and increase their spending limits during the Black Friday period. The majority of this growth came from higher-risk loans such as retail store cards and retail revolving accounts that are used for electronics, homeware and general appliances.
Remember the marketing strategy is to make you buy stuff you weren’t really planning to buy, so you need to go in with your own strategy to make sure Black Friday works for you instead of for the retailer or your credit card provider.
Tips to avoid overspending:
- Do your research. Find out whether the offer is really that great. Some retailers hike prices before Black Friday to make it look as if the “discount” price is a better deal than it actually is.
- Write down a list of things you need and what you are prepared to pay for them. Make sure you don’t go down the rabbit hole and end up buying stuff that is not on that list.
- This is a good opportunity to buy Christmas gifts, but again – have a list. Write down the people you want to buy gifts for as well as how much you want to spend on each person, and stick to it.
- If you go shopping and are worried about discipline, don’t take your credit card or store cards with you, as the temptation to overspend may be too great. Ideally, draw the cash you plan to spend so that, when it’s finished, it’s finished.
- If you are shopping online, leave the item in the cart for a while. Go back and think about whether this is something you really need to buy. In this way, you are moving yourself out of the “hot” state we get trapped in with the hype, and you can come back later with a more rational view.
- Be circumspect about the deals on offer. Some retailers offer you vouchers for spending, which means you have to come back and spend more to get the discount. Avoid those offers, because you’re not really saving anything.
- Do not open more store accounts or take on instant loans – this will hurt your credit score. Only buy if you have the cash.
