1. GOING-OUT-OF-BUSINESS SALES
Take care these aren't run by a liquidation firm that is trying to get as much money as possible for the products. You'll find products marked down that are actually marked up from the original selling price, but are now being compared to a Suggested Retail Price.
Investigators at ABC news found on "product after product we could peel back the surface price tags to reveal the old prices below. For example, the surface price tag on a Calphalon saucepan said $124.99. But the one underneath said $109.99. Rachael Ray cookware? $199 on the new label, $179 on the old. The tag on a curtain scarf said $39.99 on the top, but peel it back carefully and there was another price tag for $27.99 below."
In some cities, stores have been "going out of business" for years. Even when Blockbuster went out of business, the prices they were charging for used DVDs were comparable to the prices of new DVDs online.
2. REALLY CHEAP FOOTWEAR
They may look decent enough, but your feet deserve good support, and any shoe or sneaker under $20 is going to have some major quality issues. A lot of these shoes are made in very undesirable places by impoverished laborers, and the emphasis is always about making the cheapest product possible. Not only will they give you back problems and cause blisters and other foot maladies, they'll also disintegrate within a few months of wear.
Unless it's a genuine quality shoe that was marked down by 80%-90%, you should avoid cheap footwear at all costs.
3. ZERO-INTEREST FINANCING
There's a caveat to this one. If you are someone who is meticulous about paying bills, and know with absolute certainty that you'll never miss a payment, you should consider it. Otherwise, don't bother. Free credit comes with a ball and chain of legal documentation that is designed to jump on you should you miss a single payment, or not pay off the loan in full within a certain time frame. The interest is calculated throughout the life of the loan, often at an exorbitant rate (think 25% and greater) and it's all added on if you make one mistake. Zero-interest financing can be great for a select few, but for others, it can be a nightmare.
Black Friday is coming, and you'll see adverts and flyers advertising insane "doorbusters" deals. Just be careful with these, and do your research. Doorbusters items are often old models that the store wants to dump, or are not even bargains at all. The Wall Street Journal found that many of these doorbusters were available at lower prices at other times that year, and pricing research firm Decide Inc. found that "nearly one-third of the products had been sold at lower prices this year." It may say doorbuster, but it doesn't mean it's a deal.
5. MANY BOGO OFFERS
BOGO used to mean Buy One, Get One free. Now it means anything from Buy One, Get One 50% off, to Buy Ten, Get One free (which is technically BTGO). The BOGO offers can be great money savers, if you want two or more of anything you're setting out to buy. But they are often designed to coax you into buying more of a product than you really want; and often, more of a product that the store is trying to get rid of. Just remember to average out the cost of the product, and if you can use all of it (especially if it's a perishable).
6. FLOOR MODELS
Stores like Best Buy will often let you buy floor models at reduced prices, but beware. First, you have no idea how long the floor model was actually on display. This is not a big deal for a dishwasher or fridge because they aren't in use. But for HDTVs, Blu-ray players, laptops, and other electronics, it's significant. You can ask an employee, but usually they don't know. Being on for 18 hours a day is wearing out the life of the product, and you don't want to take that risk. You also have to consider factory warranties, any missing accessories, and return policies. Then, look at the price of a new product (it may be on sale), or one that is "open box." The latter is a much better deal as it will be a reduced price for something that's simply missing its packaging. Floor models are often too big of a risk, despite the hefty discount.
7. EXTENDED WARRANTIES
Also called service plans, these are sold to you as a bargain. "It's just an extra $50 to cover your product for three years," says the store clerk as you're checking out with a $200 printer. Well, it's $50 you don't need to spend, and it adds a significant cost to the item you're buying. Consumer Reports says, "Our data show that products usually don't break during the two-to-three-year period after the manufacturer's warranty expires and the service plan is in effect." To put it bluntly, you're paying for something that won't be needed until it's expired. Don't bother. It will be money down the drain.
8. INTEREST CHECKING ACCOUNTS
Banks want you to skip the free checking and earn interest on your money. But it is often just a way to get you paying a monthly fee for a return that's almost insignificant. You will often need to keep a minimum balance in that account to earn a paltry rate of return, and when you look at the statements every month you'll see your banking fees are greater than what you're getting back. Unless you've got a ton of money in a regular free checking account (which is unlikely), you should stick to traditional free checking.
9. RENTAL CAR INSURANCE
It may sound cheap enough at the counter when you're signing the paperwork; especially when you compare it to the hundreds, or even thousands, of dollars you may have to spend should someone even ding the car while it's in your possession. But the truth is, most people don't need it. Your current car insurance policy will usually extend to a rental car. If you pay with a credit card, it will almost certainly offer rental car coverage in the transaction. The sales clerk will scare you with bug numbers and what-if scenarios, but seriously, skip the "bargain" that's "just a few extra bucks for a lot of protection."
10. OVERDRAFT PROTECTION
Federal law now states that you have to opt in to overdraft protection (it used to be an opt out clause) but you really need to stay away from it.
The pros of overdraft protection are weak to say the least. Sure, you won't have your card declined at the register, or be humiliated in a restaurant. But to be honest, you really should have a better handle on your money to avoid that ever happening anyway.
The cons? They're huge. A simple $4 cup of coffee can cost you $35 in overdraft protection fees. In fact, a study by Moebs found that "the average customer who took out a $100 loan from a payday lender paid about $17.97 in interest and fees, compared to the $27 average for overdraft fees." When something is looking bad next to a payday loan, you know it's awful! See if you can link your checking to your savings account. It's your money you're using, not the bank's.