How to avoid overspending when shopping online

KEY TAKEAWAYS: 

✔ Shopping online is a simple and easy way to buy what you need, and over 27 million Canadians shop online every year.

✔ Many online retailers will use marketing tactics like free shipping to incent you to buy more. Know their gimmicks and avoid them.

✔ Not tracking how much you buy is a common pitfall that causes overspending on your credit card.

Today you can shop online and buy just about anything. From movie tickets, flights, phones and clothing, it’s easy to get everything you want or need. In fact, over 27 million Canadians shop online annually. In just a few clicks you can fill your cart, place an order and have your new stuff delivered as early as the next day.
 
With this easy and fast way to shop, you may find yourself buying things you don’t need and overspending on your credit card. Here are some common online shopping traps and how to avoid them. 

Promotions and deals

Retailers and brands have become very good at targeting customers based on their online shopping patterns. This allows them to promote the latest items, trends and gadgets, to the people most likely to buy. And because they know what kind of content you view online, they can target ads promoting exactly what you want. Even if you’re just ‘window-shopping’, these offers are often enough to push you from “just looking” to buying something you may not need or overspending on something you do need.
 
So, how do you stop overspending? The key is to stay focused on what you need. Try putting a note on your computer that says, “Do I really need this? And can I afford it? Do I have the money in my bank account to pay for it?” If the answer is no any of these then…don’t buy it. Before going online, decide exactly what you need and set a budget. Once you’ve done this, it becomes easy to stick to your plan, look around for the right deal at a better price, and buy only what you need.

Impulse shopping

Studies have shown that making an impulse purchase makes us happier because chemicals get released in the brain that give us a rush of excitement. When you shop online,  it’s easy for that cost to be out of sight, out of mind, especially if you don’t regularly check your credit card balance. If all your online purchases go unchecked you can suddenly have a credit card bill that’s more than you can afford to pay off.
 
Avoid this by scheduling a reminder to check your credit balance and even make a payment on your card for that amount. In essence, treat it like cash. Here are some more great tips to pay off your credit card balance.

Free-shipping trap

Many retailers offer free shipping with a minimum spend. They do this to encourage shoppers to spend more. For example, you may only want to spend $50 on a tee shirt, but you’re encouraged to spend an extra $50 to qualify for free shipping on a total amount of $100 or more.

Avoid this pitfall by buying only what you need, look for deals that include free shipping without the minimum spending limit, or see if you can buy the same item in-store where there is no cost for shipping.

Costly returns

Know what you need and look at the reviews first. They will tell you about the sizing or quality of the item you’re looking to buy, if it’s worth the price and any important manufacturer details like warranty, the material it’s made from, and how well it works. Knowing these details will help avoid the cost of having to ship goods back at your expense.
 
If you think you may have to send something back, be sure to read the return policy before you buy to understand how much effort and cost is involved. Many retailers require the buyer to cover the shipping costs to return an item and may charge a restocking fee for the return.
 

“Buy-now!” messages

“Hurry, your item is selling out fast!” “Your special discount expires in 24hrs” These are just some of the catchphrases companies use to create a sense of urgency to get you to buy. If you put an item in your cart, you’ll likely see these kinds of messages. Try waiting 24 hours before you complete the sale and if you can go a full day without it, then you likely don’t need it. So pass on the deal and keep the money in your bank account, where it can grow and be used for something you need.  

We can help

If online spending has led to a credit card bill that you cannot seem to pay off, try these tips for paying down debt. You can also ask us about personal or debt consolidation loans that provide you with a fixed payment amount, that fits with your budget that you can pay off over a set period of time.

Disclaimer: This content is intended for informational purposes only and does not constitute financial advice on any subject matter.