"Opening A Store Credit Card To Get A Discount, Then Cutting It Up"

I've heard that doing the above hurts your credit score/report because you would have an "open line of credit" but you're not using it...

True or not?

I know Wal-Mart hates it when I bring my cat shopping with me by stuffing her into a plastic bag.

(Just kidding - I heart the kitty photos!)

re: 2 for $5, 3 for $6, etc:
In Massachusetts, and probably other states, the store must sell each item at the same price as posted (that is, $2.50 each, or $2.00 each in my examples) UNLESS they have clearly posted or marked a different INDIVIDUAL item price.

So a store CAN charge "$3.00 each, 2 for $5.00" or "$2.50 each, 3 for $6.00" IF they state it as part of the price, everywhere the price is shown.

Christmas Tree Shops does this all the time, and it's on their price tags.

"Shopping in the Store But Buying Online"

One place I find this to be extremely the opposite is a favorite target as of late - the GAP. If a skirt is $29.99 online (on sale), chances are good I can find it in the store for $19.99, if not less.

Activating Your Own Phone With A Cell Phone Company: You can buy a used phone, or an unlocked phone, for full price and avoid signing a contract.

Why They Hate It: Cell phone companies want you to sign a contract. They need you to sign a contract. They burn with desire for you to be under contract with them. Cell phone stores sell 2 year contracts. That's what they sell. Not phones. So get a phone, then call the cell phone company and activate it. No contract needed. They hate that so much.

No way guys. I don't know anyone in this business who'll do it, nor do I know any carrier that'll activate you without a contract even if you brought them a brand new phone that's branded with their name that you didn't buy from their store.

Mom and pop shops don't care about you bringing in your own phone; in fact they'd prefer it because they don't have to account for the cost of the phone. Most times you can bring a phone into a store, sign a deal and walk out without paying a dime.

But to tell people that they can get a used phone and activate it on a carrier by calling them directly is not correct. Can you get it done? Anything's possible, but I can tell you that T-Mobile will NOT activate you without a contract, end of discussion. Cingular didn't used to, and as far as I know Sprint won't at all.

Verizon might but I don't know for sure.

If you're not talking about pay as you go in some form, that info seems dubious.

smd31 -
I've heard the same, so when I opened an Apple credit account to get the 90 days no payment/no interest deal (which I paid off in monthly installments over the course of those 90 days and never accumulated interest), I decided not to close the account or cut up the card when I was done. Rather, since it had a credit limit double that of my other credit card, I hold onto it in case of some massive emergency. Part of the reasoning behind this was that every person I talked to said that closing the account so quickly would adversely affect my credit rating. I think keeping a card with a $0 balance, though, has a neutral affect.

smd31,
I believe the opposite is true. Having plenty of open accounts with plenty of available credit while only using a small portion of available credit gives you a bigger credit ratio. This is the reason people advise to NOT close old accounts. It lowers your available credit score.

It's only tangentially related, but just about any kind of cable is available on the internet from reputable dealers for much, much less than those crazy stores. 15 feet of HDMI cable is $8.00 at monoprice.com.

"Shopping in the Store But Buying Online: Stores are just places where you can look at things you will later purchase for cheaper online. Look at your new laptop. Try it out. Ask questions. Buy online."

This is a great way to destroy your local economy and cause stores to close up doors and move out.

Stores in your local community pay taxes. Their employees pay taxes. Those taxes pay for things like roads, schools, fire departments, parks, etc etc.

Stores hire employees - employees who live and work and play in your community. They spend money, and vote, and have a stake in your community.

The online companies have no vested stake in your community (unless you live next to one, of course).

Additionally, by buying online you consumed energy to get to and from the store, and then you are consuming more energy to have the item shipped to your home. Not too good from an energy consumption viewpoint.

Unless the price is MASSIVELY less expensive, it is generally better in the long run to buy from a local store. And if you can, buy from a locally owned store (not always possible). The more money you spend in your local community, the more money stays in your local economy.

"Opening A Store Credit Card To Get A Discount, Then Cutting It Up: "

This will damage your credit rating - excess credit inquiries, open lines of credit, and many credit companies look for behavior like this to see who to accept as credit holders and who to deny (they can see patterns just as well as we can).

Vinny, I'm not sure that's legal. Can they actually force you to sign a contract for service? It was a long time ago, but I did this with the original AT&T wireless. RIP free incoming text messages ::tear::

@smd31

Very true, I believe.

I've even heard that those "store brand" credit cards hurt your credit score more than a regular ol' credit card. That's one deal that I think is for suckers. Saving 10% is not worth possibly affecting my credit score. Further, the would-be 10% savings can usually be attained by finding a coupon and shopping online.

It would be better to have 5 credit cards with small balances than to have 1 credit card maxed out.

Having open credit that you're not using is good for your credit score.

I know I am going to get yelled at for this but I just wanted to say that there is a benefit for buying a Cell phone through your wireless carrier. On Cingular they do Warranty Exchange and if your device craps out within the normal warranty period (and they've been known to do exchanges up to 60 days out of warranty) you can call Cingular and they'll zip you out a replacement in less than 48 hours. Yes, it will be refurbished (most of the time -- on really new devices you might get a brand new one), but so is the replacement your phone manufacturer would send you if it decided that the issue with your phone could not be repaired and required replacement (which takes additional time). If the Warranty Exchange replacement craps out, Cingular is pretty good about replacing those to. Please note that I usually deal with Business Care, not regular Care so I might've gotten better than average service though I doubt it. When the Treo 650 was having all sorts of problems a lot of customers were saved a lot of pain by getting their device swapped out with Warranty Exchange as Palm was not being helpful at all.

Customer Owned and Maintained (COAM) devices give you more freedom to bounce from carrier to carrier and not have a contract, but when it fails you're at the mercy of the manufacturer which can mean a long turnaround time for a replacement.

My father had the loss leader thing down to a science (and I followed when I needed to buy groceries and such). There are three (or more) different chains with stores within a few miles. One would have Strawberries at half of what the other stores did, the second milk, and the third bread - all in the flyers we would get in the mail. It took probably an extra 30 minutes to hit all the stores, but you'd need to go there to get fresh stuff anyway.

I often do the seasonals - just get a few extra boxes (or those red-and-green storage tubs this month, or the orange-and-black around thanksgiving). I've got more links than dealhack which I monitor with my shopping list. In some way it is a bad habit since I probably buy more junk, but I probably save enough so that it doesn't matter. But with zerodaydeals and my checking with overstock, sportsman's guide, and others, I've rarely paid more than half-price.

Oh, then there's happy hour when appetizers are half-off. So I can get as much meat as two chicken breasts for under $5 if I just wait until after 9pm. Or what must be 1/2 pound of cheeseburgers for $4 between 4 and 7pm at another place.

Now if they only had Ollie's (a Pennsylvania closeout place) in Michigan...

From what I've understood, opening a credit card will be temporarily bad for your credit rating. In the long run however, your debt-to-credit ratio will become smaller thus improving your credit score.

Sure, it could hurt the brick & mortar stores to shop online, but lots of folks do the opposite...check out the prices and deals online and then hop over to the local store to save shipping and get immediate gratification.

Moreso, retailers hate people who have really done their homework...e.g., use a store coupon on a loss leader or price match or use a competitor's coupon, maybe even all at the same time. They really don't like highly informed consumers.

Vinny, I'm not sure that's legal. Can they actually force you to sign a contract for service? It was a long time ago, but I did this with the original AT&T wireless. RIP free incoming text messages ::tear::

I believe they can, and the loophole is that they also offer a product for non-contract people (ie: pay as you go, etc.) As far as I know, the only way to have a contract plan without a contract is to keep your phone after the contract expires and don't renew it, but even then you may lose nights and weekends etc. because the term of a promotion is usually only the term of the contract.

With regards to credit cards and credit scores: I recently applied for a mortgage and had a long talk with the lender about credit ratings. He said that having several high limit cards with low balances (or any combination of cards and limits that gives you a large available balance) is bad for your credit rating. The reason is that if you have five cards with $10,000 limits each and under $1,000 balance on each, you could instantly get yourself more than $45,000 of debt.

Often, the store credit cards have low limits (<$1,000 frequently), so you don't have to worry about this. Also, you can easily restore bad credit caused by this situation by cancelling superfluous credit cards (though, as often stated here, don't cancel your oldest credit card as length of credit history counts).

I don't thin that stores "hate it" when you buy their seasonal clearance items.

In fact, I am pretty sure they like it. After all they are selling it. If they hated you buying it, they wouldn't sell it.

Its a pretty straightforward advantage to both parties. The store doesn't want to (or can't) store the items for almost another year,which costs them money. On the other hand, they might be able to get something for the items if they mark them down. By selling it to you at a discount, you get it for cheaper, they don't have to pay to store it.

You, on the other hand, do have to pay something to store the items (even if it is just giving up excess space). Essentially, the store is paying you (by giving you a discount)to store the stuff for them until next year.

And for more perishable things, like candy, its even more obvious that the store doesn't hate it.

As far as T-Mobile, actually, I have it in writing from their customer service people that there are plans available without purchasing a phone through them. Some require a 1-year contract, while others are month-to-month, but I went to them with the specific situation of having a phone I wanted to activate on their network, and they emailed me back a whole list of options. So either they've changed their policies in the last 6 months, or something else is going on.

The cell phone thing does need some elaboration. This will really only work, I think, if you have a GSM provider, and you have had a contract already. I don't think anyone is going to activate you for new service without a contract plan (except specifically non-contract plans, like prepaid and stuff), included phone or no.

However, if you have T-Mobile or Cingular/AT&T already, and you want to keep your existing contract terms without renewing your contract, you can get a GSM phone that is either locked to that provider already, or unlocked, to upgrade or replace your phone without recommitting yourself.

CDMA providers have to manually add new phones, and apparently, they just plain won't do it with non-branded phones. Because they suck.

I was at best buy for the first time over the xmas holidays and I saw USB cables for $35!!! I told my brother "I have close to a hundred unused in the office. I will send them to anyone for the price of shipping."

randomhookup is right - many people do not do CCs online. Even intelligent consumers are scared of fraud (which means they may not be that intelligent).

I've been doing the "Opening A Store Credit Card To Get A Discount, Then Cutting It Up" trick for years, and, yes, my mom taught me it. Typically, I keep the account open for a year and then close it. As far as I know, the effect on my credit has been neutral.

The "Buy 'Accessories' on Ebay Rather Than Paying Huge Markups" is a good idea also. One of the best purchases I made on eBay was an extra handset for my cordless phone.

I had a Motorola cordless phone that you could add additional handsets to. I moved into a new and bigger apartment and wanted to have another phone. Everywhere I looked for the extra handsets - on- and offline - was selling it for around $50. I found it eBay, new and in-the-box, for $15.00 + $4.95 shipping.

@44 in a row:

T-Mobile will activate any phone as long as it's GSM 1900. That's never been a question. The question is whether or not they'll activate your phone without a contract, and unless you're going prepay (To Go), the answer is no, they will not.

I'd be interested to see that list, actually.

I would love it if you can send it to feedback at insignificantthoughts.com if you have time.

Those extended warranties are the devil. I used to work at Office Max where the management would push us to push the customers into buying those things. That was one of the most irritating things about that job, because while I don't mind helping a customer find something they need, I cannot in good conscience encourage them to waste their money. And seriously, who needs a $2.99 extended warranty on a $9.99 pocket calculator?

Walgreens does not always give you the $2.50 for a 2 for $5 deal. For most of their weekly ad items one can just buy one item for the cheaper price (in this example $2.50), but they have certain items that are price specifically to only give you the cheaper deal if you buy multiple items. By this example the first item will ring up as $3.00 and the second at $2.00.

T-Mobile will activate any phone as long as it's GSM 1900. That's never been a question. The question is whether or not they'll activate your phone without a contract, and unless you're going prepay (To Go), the answer is no, they will not.

Just to pick a nit: T-Mobile doesn't have to activate your phone. Unless they're doing something really weird, they don't even have to know you have a new phone. As long as your phone is compliant with their network (GSM 1900, and 850 for backup if you have spotty coverage), you should be able to pop your SIM card into your new phone, and it'll work.

for the love of god, never buy accessories - cables and such - at best buy. $50 for a dvi-d cable?!?

@ edgesmash:
I'm not completely sure who to believe, but I know for a fact that if you don't have enough available credit, it will read 'proportion of balance to credit limit is too high'. I've heard the good middle ground is to use about 30% of your credit to achieve a higher score.

When will we get an edit button? I meant to say that (your credit report) will read '...

While you can add a phone to a network and buy one used on eBay or something, I dont know of any companies that allow you a pay as you go plan for them. Almost all of them have one set of phones for pay as you go that are locked into their system as such, and another for contract calls. Unless they changed this recently, almost any phone you buy "unlocked" is still locked to their network as a contract phone and will require one to be activated.

You CAN move to a new phone from a old one though and not change your plan. This is especially good for those people who kill phones a lot and dont want to buy a new one at full price.

But no matter how you look at it, cell phones have contracts on them, there is no such thing as the contractless cell phone.

Good Post. I liked it. I didn't read it all. I'm a busy man. However, I liked what I read, especially the bit about 2 for 1's - absolutely correct.

Here is my all time favourite thing to do that shops absolutely hate.

Buy something. Remove all the packaging. Be VERY smug and patronizing about carbon footprints as you place it in a canvas bag. Take it home.

This is the greatest feeling and is particularly good at a supermarket when they've pre packed all your vegetables. I unpack them all. the worrying thing is that the checkout operators gasp and sigh in awe and wonder as if they've never considered placing a vegetable into a bag without first sheathing it in plastic.

Can someone please specify where these price watching websites are? I have only found one so far, but I don't always buy from amazon..

http://www.frozenwarrior.com/~pricewatch/

Thanks,
Fabian.

Activating Your Own Phone With A Cell Phone Company

...Vinny etc.

...regardless of whether you can or cannot do this, everyone still has an opportunity here. No doubt anyone thinking about this already has a phone/contract. Most of the time you can only get a new phone when your 2 years is up by signing up for another 2 years - OUCH!

What I do at this point is buy a new phone cash, keep the same great monthly rate I already have and don't have to commit to another 2 year contract.

ultimately you have a new phone, pay month to month, and get the same great rate you hopefully got when you first started with your service provider.

Hey vinny... sorry but you are wrong about that. You don't need a contract to get service. I for one don't have a contract with cingular and my bill is the same every month if I don't go over minutes. It's still a plan, but I am not obligated for any length of time.

How they do it, is they only give you a max of mins you can overspend, and if you spend that, you have to pay the extra before they will let you continue that month.

As long as you are paying for enough minutes, this is no problem.

I have another friend who does this with T-mobile. He refuses to get a contract. I just happened to be done with a 2year and went back in to change plans. And oh boy how they tried to get me to switch to a plan with a new phone to get me back under contract.

Also, if your contract runs out, you don't lose whatever perks you had. They are good till you change plans or leave the service. (Atleast with t-mobile)

You're dead on about the accessory hook. I used to work in a bike shop where we had to be really compeditive on price of big ticket items. But it was the little stuff that people bought all the time that we marked up 100% or more. We sold that stuff all day long...

So basically, Brent, you have Go Phone, and it's not the same thing as a regular plan, which is just what I said.

The only way your "friend" could do that would be to have a contract and not renew it.

@Spanky: We were talking about phones in general, but you are correct, although 850 means nothing on T-Mobile as they're only 1900 in the US.

sfcable.com. Use it. Love it. I use them for our IT department.

The only nit I'd pick about frequencies is that you're still best off purchasing a phone with 850 if you're going to be using it in the US. Although T-Mobile's own towers are only 1900, T-Mobile's coverage is comparatively limited, and from what I understand relies heavily on tower-sharing arrangements with other carriers. And even though most GSM carriers do support the 1900 band in addition to 850, I've read that many carriers use the 850 band for sending control signals, in which case you can be SOL if your phone doesn't support it.

(I just bought a new phone retail, and spent way too much time trying to figure out what would work best with my current service, which is an old AT&T plan with pretty fantastic rates).

What 44 in a Row said.

In areas where T-Mobile's coverage is spotty, sometimes you'll end up needing to talk to (Cingular's?) 850 network. It's a necessity for some people (the Albuquerque area is apparently full of dead spots, for example), and it's a pretty good idea to have that backup available if you travel much at all.

(Also: I just bought a new unlocked phone for an off-contract ATTW account, too.)

Regarding the effect of too much available credit on your credit score, I was also advised by my credit union that it was not a good thing. My available credit was approaching my yearly income, and I was told that could look like a high risk situation to lenders. Because it gave me the ability to walk out the door in the morning and be buried in debt by the end of the day.

When I asked what I should do, they suggested keeping one card with a high credit line and lowering the other to $3000, which he felt was a pretty standard credit line for people with accounts in good standing. Any lower and it might look like there was some sort of problem.

So, that's something to think about when opening store accounts. There's the debt/credit ratio to consider, but there's also the income/credit ratio to consider as well.

store credit card to get the 20% off then killing the account destroys your credit. just an fyi. credit reporting agency's use the length of credit accounts open to determine credit risks. they also check how many accounts you have open as well.. so getting it, paying it off, and keeping it for a while is a bad idea too if you plan on repeating this little scam. while initially you may get 20% off your hundred dollar purchase, that house or car you might be eying in few years isn't going to be so nice when you get a 10% interest rate instead of a 6 because of your jacked credit. don't do this one.

having open credit that you're not using isn't good for your score at all. having a couple of accounts open with a good balance to debit ratio is good for your score. having a ton of accounts open is a good way for you to (potentially) rack up a ton of debit overnight, and the credit companies will ding you hard for that.

@davidtrento: I do that all the time too! When I was doing my Christmas shopping last year, I brought a big canvas tote to put all my purchases in so I wouldn't have to waste plastic bags. Man were the stores steamed! One cashier at Old Navy even said point blank that they wanted customers to carry their bags so as to advertise for them.

And as for the credit cards... we were told when applying for a mortgage to close all credit cards we could... even if we had no debt, the banks look at it as "debt you could have" and it makes it harder to get a mortgage.

Here's my story on loss leaders. A grocery store in my area ran a sale on Quaker Oatmeal at $1.00 per box. I had a coupon, meanwhile, for $10 off the purchase of any ten Quaker products. The store flyer said nothi