Black Friday: Fun, hype–or class warfare?

business girl with shopping bagsAmerican shoppers seem to fall into two groups: those who are planning their early-morning raids on major retailers (starting as early as Thanksgiving morning!) and those who sneer at people who head out into the cold in search of bargains.

I used to belong to the latter group, until a friend pointed out I was being a snob. Here’s how Los Angeles Times reporter Shan Li puts it in today’s article “Black Friday highlights the contrast between rich and poor.”

“Increasingly, the seasonal shopping surge has become a window into America’s class divide, in which high earners have benefited from a booming stock market and rising home prices as many others still grapple with stagnant incomes and lingering financial anxiety.

“You have people who really need a bargain — they will sit out for two days to get that deal because that may be the only big thing they can afford for the whole family,” said Britt Beemer, founder of America’s Research Group. “Luxury retailers don’t do very well on Black Friday because their customers are not going to fight the crowds.”

Li quotes a PricewaterhouseCoopers report that says the ranks of strapped shoppers who earn less than $50,000 a year are growing from 63 percent of American shoppers two years ago to 67 percent today.

There are alternatives to fighting the crowds, of course. Check out this interesting post at the Nonconsumer Advocate: “10 ways for a zero-dollar Christmas.” Online retailers are offering plenty of good deals as well. Then there’s the whole Shop Small thing, although you need an American Express credit or Bluebird prepaid card to get money back.

If you are planning to venture out in search of deals, consider a good price comparison app such as RedLaser or PriceGrabber on your smart phone, if you have one. They’re good tools to help you figure out which Black Friday bargains are the real deal. A site to track is DealNews, which not only alerts you to deals but which keeps track of previous low prices. If you can’t check prices on the go, at least hang on to your receipts so you can exchange anything for which you find a better buy.

Those of us who will be sitting snug at home shouldn’t feel too self-satisfied, particularly if–like me–you order a lot from a certain online retailer. Read this Motley Fool article about which retailer treats its employees worse: WalMart or Amazon.

Grab your Small Business Saturday credits now

Zemanta Related Posts ThumbnailAmerican Express’ “Small Business Saturday” credits are back, and they’re more lucrative this year: a $10 statement credit for purchases of $10 or more at qualifying small businesses on Nov. 29. You can get up to $30 in credits on each registered card.

I signed up three of our Amex cards yesterday when registration opened, which means we’re now eligible for $90 in statement credits. I then checked the list of small businesses in our neighborhood where we can use the credits, and sketched out what I plan to buy where. I’ll get a chunk of my Christmas shopping done, while also picking up supplies I was planning to buy anyway.

Free money is always good, and free money to support the businesses that support our community is even better.

Amex says registration for the cards is limited, so hop to it. You can use the “Amex offers for you” tab in your online Amex account or the ShopSmall.com site. Using “offers for you” tab seems to preclude you from registering more than one card, but it appears you can register additional cards at the ShopSmall site. Make sure to read the offer terms so you understand how the credits work and what type of transactions don’t qualify (such as transactions made with an electronic wallet, through a third party or if the merchant uses a mobile or wireless card reader to process the transaction).

A good prepaid card? It’s no longer an oxymoron

Credit card backgroundFinally, there’s a prepaid card that may deserve a place in your wallet.

The American Express Serve card eliminates, or at least makes it easy to avoid, most of the niggling fees that make typical prepaid cards a bad deal:

  • Users will be able to load the card with cash for free at 14,000 CVS and 7-Eleven stores, according to Stefan Happ, Amex’s senior vice president for U.S. payment systems. (The usual procedure involves a reload fee of $3 to $4, and it’s a hassle: you have to first buy a reload card at a store, then call a toll-free number or go online to add the money to your account.)
  • ATM withdrawals are free at 22,000 MoneyPass network machines. The fee for out-of-network withdrawals is $2. That compares favorably to the $2.83 to $2.88 the average prepaid card charges, according to NerdWallet.
  • There is a $1 monthly fee that can be waived if you use direct deposit (have paychecks or government checks loaded directly onto the card). The fee is also waived if you load at least $500 that month.
  • Getting a card is free through the end of the year; after that, buying one will cost $2.95.

The card has a bill pay function and will have mobile check capture (where you can take pictures of checks to deposit them) later this year.

And get this…the card even has a savings account, called Reserve. You can set up one-time or recurring transfers that can help you save up for a purchase or get started on that all-important emergency fund.

American Express has a similar product called Bluebird, developed with WalMart, which provides free cash reloads at its stores. Not every community has a WalMart, however (shocking, I know)—New York City being one example of a WalMart-free zone. Bluebird has been singled out, by NerdWallet and others, as one of the best prepaid cards; Serve makes a good thing even better.

This is the first card I’ve seen that could actually be a viable alternative to a real checking account. That’s the audience Amex is targeting, of course: the tens of millions of Americans who are “unbanked” or “underbanked.” Many either can’t get an account or have given up on traditional banks because of all the fees. But because so many cards have hidden or less obvious fees—reload fees charged by third parties, or ATM surcharges—they often wind up paying more than they might at a consumer-friendly

“We want to be consumer advocates,” Happ told me. “We really put our money where our mouth is.”

Normally I’d dismiss that as PR happy talk. This card, though, delivers on the premise.

It’s also a decent alternative for delivering allowances to teenagers. Happ has set up two subaccounts for his daughters (who are over 13, the minimum age for such subaccounts), and delivers their monthly allowance to them via Serve cards.

The one bummer—it’s an American Express product, so it’s not accepted everywhere that Visa and MasterCard are. I haven’t experienced that as a huge problem; most stores I use accept Amex, and typically the only time I have to pull out an alternative I’m at a smaller independent store or a doctor’s office. But it’s something to keep in mind.

How to find the right rewards card

Dear Liz: Should we get a rewards card? We have excellent credit scores. I’m a stay-at-home mom and my husband has a good, steady job. We spend about $6,000 a month with our debit card or automatic drafts from our checking account. I think our family should have a rewards card. My husband disagrees and says that for the amount we spend each month, we wouldn’t rack up any points. Is he right? If we should get a card, how do we pick the right one?

Answer: If you’re positive you’ll pay your credit card bill in full every month, you would be great candidates for a rewards card.

Right now, you’re passing up at least $720 in rewards annually. That assumes you’d be getting a card that rebates 1% of your purchases. With excellent credit scores, you could qualify for even richer rewards cards, since those are reserved for people with the best credit.

The simplest rewards cards are the cash-back cards, which rebate a portion of the purchases you make. Card comparison site NerdWallet recently named the Chase Freedom card as the best cash-back card with no annual fee. The card gives you a $200 sign-up bonus if you spend $500 in the first three months. All your purchases earn 1%, and you can earn a 5% rebate on certain categories of spending that change every three months.

NerdWallet also recommends American Express Blue Cash Preferred, which offers a $100 bonus if you spend $500 in the first two months. Supermarket purchases earn 6% cash back, and spending at gas stations and department stores earn 3%. Everything else earns 1%. “There is an annual fee of $75,” NerdWallet.com notes, “but your rewards easily offset the cost. In fact, $25 in groceries every week is enough to make up the difference.”

There are other types of rewards cards that earn points or miles for travel, or discounts on gas. You can learn more about these cards and shop for offers at NerdWallet or one of the other card comparison sites, including CardRatings.com, CreditCards.com and LowCards.com.

It’s important, once you get the card, to keep track of your spending so you never accumulate a balance you can’t pay in full. Always pay your account on time, since a single skipped payment can knock up to 110 points off those excellent scores.