Make these 3 smart money moves to score the best Presidents’ Day

On Feb 20, 2023

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Eager to take advantage of Presidents’ Day sales, many shoppers may not realize how much holiday discounts on a range of items – from mattresses to home appliances and electronics to new cars – could really cost them.

“Consumers should look closely at the fine print and long-term financial impact of spending around the holidays,” said Nicole Elam, president and CEO of the National Bankers Association, a trade group representing minority-owned and women-owned financial institutions. “For two reasons – the impact of inflation during a pandemic era and interest rates – what appears to be a deal may not be.”

Shopping smart is essential

“I love a sale,” said certified financial planner Kamila Elliott, CEO and senior wealth advisor at Collective Wealth Partners in Atlanta. But, before making that purchase, she said, it’s important to answer three questions.

“You have to ask yourself: Do you need it? Do you love it? And, can you pay it off immediately?”

Before you charge the purchase to a credit card, remember this is one of the most expensive ways to borrow money. The annual percentage rate on a credit card is at an all-time high of nearly 20%.

“If you don’t have the ability to pay off the credit card debt immediately, you’re not even getting the savings from the sale because you’ll be paying that interest over a month or several months,” said Elliott, who is also a member of CNBC Financial Advisor Council.

Consider these three strategies to help save money while you shop for holiday sales:

Use a 0% interest credit card: With this type of introductory offer, you may pay no interest for 12 to 18 months. Make minimum monthly payments (or a little more) over the promotional period. Your goal should be to fully pay for the purchase before the 0% interest period ends and the rate goes back up. Credit experts say that a cash-back rewards credit card with a 0% interest introductory offer may be an even better deal. Several cash-back cards give back a flat rate of 1.5% of the amount of your purchase no matter what you buy.
Compare replacement cost vs. warranty: An extended home appliance or electronics warranty may give you peace of mind, but read the contract to see what exactly it covers. How long does the warranty last? Who will make repairs? How quickly?
Compare the warranty’s cost over time to the replacement cost of that item, Elliott said. It may be more cost-effective to put that “extra” money in a special, savings account earmarked for a new appliance if yours breaks. In some cases, if the product is something you really need immediately – like your smartphone or laptop – it may be worth it to buy the warranty, Elliott said.
Look for lower loan rates at a credit union: Many car brands offer Presidents’ Day deals…