Black Friday: keep your financial balance

22/11/2022

Black Friday is approaching and many take advantage of these dates to make purchases and benefit from some kind of discount.

It is true that adverts showing us products with large discounts can encourage you to buy things you don't really need. Making a list beforehand of the things you would like to buy and setting a budget for them can help you avoid the temptation of compulsive buying. This way, you will reduce the chances of the price reduction of a product steering you away from your initial idea.

Also, prices can change in a short period of time and sometimes the advertised discount is not as good as you first think. If, for example, you want to buy a household appliance and you decide to wait until these dates, it is useful to know the price before the sales campaign and compare it with the sale price that the same appliance may have in other stores.

You should also bear in mind that:

• If you are considering financing the purchase of a consumer good, beware of "interest-free" financing! Interest-free financing means that the nominal interest rate is zero, but this does not mean that the rest of the cost is zero too (it may entail fees).

To find out what the financing will really cost you, you should look at the APR of the offer.

• If you pay by card, you should be aware of the characteristics of the card. Using a credit card with deferred payment is not the same as paying with a traditional credit card. The interest, fees and repayment terms, among other things, will be different depending on the type of card you use. If you make purchases with a debit card, the amount of the purchases will be deducted from your account balance immediately, but you should be aware that it is possible that your bank may grant you an overdraft and charge you a fee for it. To avoid this, check that your balance is sufficient before making the payment.
• If you buy online, you should take extra precautions: make sure that the website is secure.
• More and more online retailers are offering deferred payment for small purchases. If you opt to pay later, don't forget to take into account the charges you will have to assume in the coming months when organising your personal finances.

As a general rule, if you choose to finance your purchase, do it wisely. Improper use of credit can lead to over-indebtedness and damage your long-term financial situation and, therefore, your standard of living. When you apply for credit, you must be sure that you will be able to pay off the debt in the future without upsetting your financial balance.