Debt Free

Black Friday! It's Here at last. Some of the discounts featured by retailers, mostly for early risers, have to be seen to be believed. Care must be taken however, to avoid being taken in by the 'too good to be true' prices. Retailers use these low prices like that angler fish uses his light in your kid's Finding Nemo DVD. It works too. They reel people right in. Don't fall for these tricks used by retailers that can entice you to overspend or bust your budget.

1 - Easy credit terms – Can't afford that new 42” plasma HDTV, even though it is 50% off? Don't want to pass on that mechanics tool set, new coat, or the new Garmin Street Pilot GPS for ½ what they were just 8 short hours ago? Just fill out this handy form and we'll take care of everything. There you go, you've got an extra $7,000 available to boost your holiday shopping spree. Oh! Did we forget to mention that this card has a 18.5% APR? Many retailers have ridiculously easy credit terms to entice consumers to get in on the deals. They'll finance almost anyone. Declared bankruptcy yesterday? Okay, no problem! These easy credit terms come at a price, however. They are often not the most advantageous for Joe/sephene consumer. So watch out!

Circuit City does have 42” Panasonic plasma HDTV, the TH42PX60U, for only $1,199.00. It is one of the best 42” plasma displays on the market, price independent, so it really is a great deal. By the time you read this, it'll probably be gone, however. That same set was featured at many other retailers as well, for very low prices. My brother-in law bought one, so I'll let you know how it looks. He bought it from Circuit City Online Thanksgiving Day and took advantage of the free delivery (offered by many retailers), so as to avoid actually rolling out of bed at 4:00AM.

NOTE: Many 720p (actually 720 or 768 native resolution) plasma and LCD flat panel HDTVs are slated to be replaced by 1080p models in the not too distant future. In the case of smaller sizes, such as 32” - 42” panels, the existing 720p models will still offer an outstanding image when fed from a high quality source. Don't let the impending arrival of 1080p dissuade you from scooping up one of the existing units when the prices hit new lows, as they seem to be doing now.

There will come a price point where manufactures and retailers have compressed the prices to the extent they can not go much lower. This is because there will be little room below them for smaller or lower content units. In the case of 42” HDTV flat panel TVs, we are very nearly at that point. For example, if a 42” plasma HDTV is at $999, there must be room below that in the price structure for smaller sizes such as 37”, 32”, 26”, etc. So, although manufacturers and retailers seem to be on , as one industry insider put it, a “Race to 0”, in reality there will come a time where prices will cease to drop, and technology and/or feature sets will improve, while prices remain the same.

One Additional Caveat - Hold off on HD-DVD or Blu-Ray dis players for a while as well. From a usability persepctive HD-DVD is not ready for prime time, although the picture and sound is fantastic when viewed on an HDTV set. As for Blu-Ray Disc players, they're even more expensive than HD-DVD, there is very little selection currently on the market, and some of the players have had firmware issues that cause the image not to look as sharp as it should. Not what you want in a $1,000 prioduct. Hopefully, in short order, the manufacturers will have all the issues worked out.

2 – Discontinued goods – In some cases, the low prices are on items that are about to be replaced by a new model, or discontinued altogether. In the case of consumer electronics or computers, the replacement will often have better performance and features than the outgoing model, and be priced lower to boot. In clothing, this may not be a problem, depending on how fashion sensitive you are. If the price is really low, and you actually need the merchandise anyway, it may really be a bargain. If not, you just got suckered into riding out of the store on a white elephant.

3 – Unattainable Rebates – This is a favored method of making the price seem artificially low. If you actually receive the rebate (You will send them in, right?), the item may actually be the bargain it seems, but you've got to stay on top of the rebate companies like they're sending you your last dollar. If the rebate is small, the time you spend to actually collect the rebate may not be worth it. In this case, you need to view the rebate as an added bonus, and only purchase the product if the value proposition is there even without the rebate. A close cousin of this is the “Get 5% back on All Your Purchases” line often seen on Black Friday sales. This often involves getting a new store credit card, and then the 5% back is only on additional company merchandise you purchase. Getting an additional credit card or revolving store account, and then buying more items in order to receive the 5% rebate, does not seem like a very good way to become debt free. Avoid these offers like cheesecake on a diet.

Happy Thanksgiving! Happy Holidays!