5 Common 'Deals' That Aren't Actually Saving You Money

Every time you walk into a store these days (or let's be honest: Every time you walk outside or even look at the Internet), you're bombarded with promises about deals that might "save you hundreds" or otherwise change your life forever. You're smart enough to figure out that most of these aren't true, but there are plenty of deals that seem legit and promising ... until they kill your bank account and/or credit score for life. So how do you spot the real from the fake?

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We chatted with Bethy Hardeman, chief consumer advocate at Credit Karma, to get a better idea of what kinds of "deals" aren't actually saving us much at all. Here are her top five deals you're better off without.

  1. Store credit cardsStores get you with the sweet deals at the register (15 percent off the massive load of clothes you just dragged up there? Hell yeah!) -- but oftentimes, these can be trouble down the road.

    "The average store credit card's APR is around 23 percent, with some retailers' cards as high as 28.99 [percent]," explains Hardeman. "If you do choose to take advantage of that discount at the register and sign up for a card, try to pay off your balances in full each month and avoid the temptation to overspend."

    On top of this, retail cards tend to have lower credit limits, which can make it tough to keep up your credit score. And, the store will be probing into your credit report and history before approving you for a card, which can affect your score negatively. 

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  2. Short intro APR periods. The language of credit cards can be confusing to understand, but basically: Credit card companies love to rope people into balance transfers (translation: moving your debt to a card with a lower interest rate) with phrases like "0 percent APR for six/twelve/eighteen months."

    That means you pay no interest on your due balance for six or twelve or eighteen months, which is great, but Hardeman says there's a hidden caveat here: "If you aren't able to pay off the entire balance before the introductory rate period expires, you will be responsible for paying interest on the entire amount originally transferred over, even if you have just $1 left on your balance."

    Yikes. So Hardeman advises choosing a card with a nice and long intro APR period for padding, especially if you have a lot of debt to pay off.

  3. Cash advances. Though the idea of free cash is enticing, Hardeman warns you'll end up paying way more than the cash value if you choose to charge your credit card for cash because there's no grace period for cash advances.

    "This means that interest starts to accrue from the day you withdraw the money," Hardeman says. "Worse still, many banks charge higher interest rates for cash advances compared to purchases made directly with your credit card because they view cash advance loans as riskier."

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  4. Layaway plans. With layaway plans, you can pay for an item over a period of time with a store's help, but Hardeman advises thinking twice before agreeing to one.

    "Retailers frequently charge service fees because they have to process multiple payments for the same item," Hardeman says. "They can be as much as $10, which doesn't make sense if you're buying a smaller item. Paying $10 for a $40 kitchen appliance adds 25 percent to the total cost."

    She also notes that the fine print of layaway plans often sets up cancellation or restocking fees if you can't or choose not to complete the plan. Then you're paying for an item you never receive, which is a bad investment all around.

  5. Holiday sales. Sales can be great when an item you already need gets a price cut, but Hardeman notes that big sales encourage people to spend money they wouldn't otherwise spend. "If you are saving 50 percent but don't need the item, are you really saving?" Hardeman asks.

Image via iStock.com/mediaphotos

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