Extended Warranty Programs

Are You Ready For Holiday Shopping This Year?

Know the holiday retail and spending trends

With the increase in gas prices, and the slow down of the housing market, you may think consumers will cut down on their holiday spending in 2006. But many reports and surveys have shown these concerns will have little to no impact on what consumers will spend this year. According to a report from the Radio Advertising Bureau, consumers have withstood challenges this year from energy costs, slow growth in jobs and softness in the housing market, and they will continue to be bullish about the economy and their own financial well-being. Overall spending is expected to be up for many key categories.

Gift Cards

Same as last year, gift cards are expected to be the top holiday purchase this year. Last year, 66 percent of consumers bought at least one gift card. Gift cards are an excellent idea if you are not sure what the person will like. However, many people think they are too impersonal. Retailers on the other hand, like gift cards. They like the idea when consumers come in to use the gift cards, there is a good chance the consumer will want to use the entire gift card balance and even spend more than the gift card.

Department Store Credit Cards

Everyone knows when the holiday season approaches, many department stores offer zero-percent financing or an additional percent off for consumer purchases. A survey conducted by Roper Public Affairs, stated that when consumers were asked how likely they are to make a major purchase this holiday season using either a zero-percent financing or a no payments/no interest offer, fewer than two in ten (18 percent) say it is very likely that they will. Additionally, 71 percent responded that if they were to take advantage of such an offer, they would plan to pay off the total due before incurring any interest charges.

This same survey also found a correlation between age and income level. Ninety-five percent of consumers 65 and older say they are highly unlikely to take advantage of store credit card offers. Twenty-five percent of consumers with household incomes $50 k or greater say they are very likely to take advantage of such an offer. Eighty-one percent of consumers with household incomes $50 k or greater say they would pay off the whole purchase before the interest is due.

If you choose to take advantage of such deals, make sure you pay the purchase off as quickly as possible. Department store credit cards are known for charging ridiculously high interest rates after the promotional offer expires. If this happens to you, the initial savings you received on the product when you first bought it will turn into a net loss, especially if you rack up late payment fees. Online Shopping

Federal Trade Commission (FTC) offers tips for safe online shopping

Know the seller. Confirm the online seller's address and phone number incase of problems

Know exactly what you are buying. Look out for descriptions like "refurbished, " "vintage, " or "close out." These terms may indicate that the products are not in mint condition.

Compare prices of the same product on different website.

Check the privacy policy to make sure the website will not share your personal information with anyone.

Pay with a credit card. Credit cards offer consumers the most protection. Do not send cash!

Use a secure browser. Buy only from websites that offer secure payments.

Consider shipping and handling costs.

Print records of your online transactions. (receipts, confirmation e-mails, bank statements, etc.).

Understand the return policy.

Check delivery dates. A FTC rule requires sellers to ship items as promised or within 30 days after the order date.

Retail store information for 2006

According to Forbes.com, here are their holiday picks. Specialty stores like Victoria's Secret, Coach and Aeropostale, will do very well because consumers want premium products. Another specialty store Gap, is introducing their limited edition "Product Red" clothing line just in time for the holidays. Product Red is being promoted by Oprah Winfrey and Bono to raise money for AIDS victims in Africa. Forbes.com says Product Red will bring a whole new customer to Gap stores, some who have not shopped there in years. Huge stores like Wal-Mart and Target have already shown a holiday shopping increase in October. Wal-Mart is now selling top notch electronics such as High Definition (HD) televisions. JC Penny is also expected to do well due their large advertising budget and their "Red Box" holiday campaign. The Red Box campaign will feature 20 30 items in advertisement across the whole country.

Protecting your purchases

If you decide to shop with a credit card, choose one that offers a purchase protection plan. There may be an instance that you buy a product that you do not want or a product that breaks or falls apart. Since many stores have a no-return or return for store credit only policy, you are usually out of luck. This is when purchase protection plans come in. If you shop with a credit card that offers return protection, you can receive reimbursement for the purchase price even if the store of origin has a no-return policy. Return protection programs typically involve a limit on the amount per item and an annual limit for the cardholder. Other qualifications such as the condition of the purchased item and the existence of any return/satisfaction guarantee programs at the store may apply. These plans also offer manufacturer's extended warranties. You may not need to buy additional warranties on major purchases because some credit card companies will extend the terms of the original manufacturer's warranty. This service could save you the expense of purchasing extended warranty programs. Make sure you familiarize yourself with coverage restrictions before making your final decision.

By: Pete Glocker

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Pete Glocker is employed in the Education and Charitable Services Department at Debt Management Credit Counseling Corp. ("DMCC"), a 501c(3) non-profit charitable organization located in Boca Raton, Florida. Pete graduated from Florida Atlantic University with a BA in Multimedia Journalism and was a web producer Intern for Tribune Interactive products Sun-Sentinel.com and SouthFlorida.com. DMCC provides free financial education, personal budget counseling, and debt management plans to consumers across the United States. Debt management plans offered by DMCC help consumers relieve the stress of excessive debt by reducing credit card interest rates, consolidating and lowering monthly payments, and stopping collection calls and late fees. DMCC financial counselors can be reached for free education materials, budget counseling and debt management plan quotes by calling 866-618-DEBT or by visiting www.dmcccorp.org Pete Glocker can be reached by email at pete@dmcccorp.org.