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Avoid bank and retailer fees and other big money wasters this holiday season. Holiday time is tough enough on your budget. You don’t want to spend more than you planned because a retailer or credit-card company came up with some tricky way to squeeze more money out of you. Well, you can beat the system! You just need to know where to look for these sneaky shopping traps.

Trap No. 1 Hidden debit-card fees – Whipping out your debit card to pay for holiday goodies probably seems like a budget-friendly idea because the cash is immediately withdrawn from your account. No need to worry about paying interest on a credit card or fees for bounced checks. But using a debit card could end up costing you a lot more than you’d think. In the past banks would reject a debit purchase that was more than the amount you had in your account. But many banks now process the purchase-and then hit you with an overdraft fee. Those charges range from $25 to $35 at 16 of the largest banks, according to a July Consumer Federation of America survey. If you buy several gifts in one day and use your debit card to pay for gas, groceries, and lattes, you could be hit with multiple fees. In September, Bank of America, JPMorgan Chase, and Wells Fargo announced plans to lower or eliminate overdraft fees. Let’s hope other banks will follow suit.

Dodge it! Use a credit card for large purchases, especially if you pay the full balance each month. Credit cards give you a lot more protection than other forms of payment if your account number falls into the wrong hands or if you have a legitimate beef with a seller and want to dispute a charge. Use a debit card only for small purchases if you’re relatively certain you won’t need the extra protection a credit card provides and you’re sure you won’t go over your balance.

Trap No. 2 Phony sales – Many highly promoted “door buster” sales, particularly ones that take place on Black Friday (the day after Thanksgiving) and the following Cyber Monday, offer deep discounts on hot-ticket items. Black Friday has earned the reputation as a bargain-hunter’s dream because retailers feature a limited quantity of high-profile, attention-grabbing toys or electronic items at or below cost to draw you in, hoping you’ll also purchase lots of full-price merchandise. There’s a more deceptive version of deep-discount sales, though: An item is advertised at a super low price on a Web site, but it’s a phony come-on. The goal is to get you to buy something else and spend much more. If you try to buy just the sale item, you’ll often find that the retailer cancels the sale, claims the product has been back-ordered for months, or sends you lower-quality merchandise or items that you never ordered. Returns can be difficult, if not impossible.

Dodge it! To protect yourself when you’re shopping online, be wary of unrealistically low prices. Don’t make a purchase if you’re pressured to buy additional products or services. To be super safe, stick with merchants you know. Also, follow these other tips: If you go to a door-buster sale, don’t buy other items in the store unless you have done the research ahead of time and know they’re a good deal. Don’t worry about missing a one-day sale. It’s very likely that another super sale will come along. Last year we found plenty of so-called one-day sales that were extended. If someone on your list wants this year’s hot item, hit the stores as soon as you can. Go early to beat the crowds or try online. Last year we found that online retailers sometimes offered special savings early in the morning.

Trap No. 3 Unnecessary warranties – This holiday season, shoppers are expected to spend more than a billion dollars on extended warranties. Appliance and electronics retailers push shoppers to buy extended warranties or service plans because the store keeps 50 percent or more of what they charge for them. That’s much more than they can make just selling the products. But extended warranties are notoriously bad deals because some repairs are already covered by the standard manufacturer’s warranty that comes with the product. And our data show that products seldom break within the period the extended warranty covers — after the standard warranty has expired and within two to three years of purchase. When electronics and appliances do break, the repairs, on average, cost about the same as an extended warranty.

Dodge it! Our decades of brand research have shown that products are reliable enough that we don’t think you need extended warranties. But if you’d like the peace of mind an extended warranty can provide, you might be able to get similar coverage by charging the item on a credit card. Check your card agreement; some cards, especially gold and platinum ones, lengthen the original manufacturer’s warranty by as much as one year. If you can’t rely on your card’s additional coverage, channel your inner Scrooge. Get the cheapest deal you can on an extended warranty by including the cost of one in your price comparison. Always try to negotiate a better deal. And don’t pay more than 20 percent of an item’s purchase price for any warranty.

Trap No. 4 Gift-card charges – Sure, buying gift cards can shorten your holiday shopping time. You don’t have to rack your brain to come up with an appropriate gift for the hard-to-please folks on your list or spend hours hunting for whatever present you settle on. But we advise shoppers to avoid gift cards. Some come with purchasing and processing fees, expiration dates, transaction fees, and inactivity fees that unfairly diminish their value over time. And the recipient could end up with a worthless piece of plastic if a company goes out of business or files for bankruptcy protection after you buy its card. There’s also a good chance your card will not be used. A quarter of the people we surveyed last November still hadn’t used a gift card they received during the previous holiday season.

Dodge it! In one bit of good gift-card news, American Express announced in September that it would no longer impose fees on its gift cards — but it will still charge you $3 to $7 to buy one. Consider giving cash instead of any gift cards issued by credit-card companies, banks, or malls. If you do buy a gift card, stick to those issued by retailers, which are relatively free of expiration dates and pesky fees.

Trap No. 5 Return fees – Many electronics items, especially cameras, camcorders, computers, monitors, printers, scanners, projectors, PDAs, and GPS devices, are subject to a 15 to 25 percent restocking fee if they are returned opened or if they’re not in a factory-sealed box. If you return a refurbished item, it might be subject to a restocking fee, too. You might even be charged a 15 percent restocking fee for some appliances, tools, and lawn-and-garden products if you don’t return them in their original packaging. Merchants can’t resell as new any item after the package has been opened, so they penalize you for opening it.

Dodge it! Don’t open the package if you don’t want what’s inside. Items like computer software, music CDs, and movie DVDs aren’t generally returnable for another title after the seal has been broken. But if you do break a seal, some stores will give you a partial refund of a restocking fee if you ask. You should not have to pay a restocking fee if the item was defective when you unwrapped it. And always find out about a store’s return policy before you buy. Things like restocking fees and limits on what you can return vary among retailers, and some retailers have a different policy online than they do in their stores.

Source: ConsumerReports.org

We have all been affected by the economic downturn in America. We are checking our kid’s “Dear Santa” list, scratching our heads and wondering, “How am I going to afford the mortgage, let alone little Johnny’s wish list?” I have been implementing several family traditions over the last five years and have found that theses tips will help take the emphasis off the money, and place it where it belongs, in the holiday spirit of Christmas and the holidays. Here are five practical and fun suggestions that any family can utilize for quality holiday time with family, without a quantity of bills come January.

1. Pass The Rubber Chicken, Please!

A long-standing and treasured hilarious tradition in my family has been passing along the same Rubber Chicken, with special additions created by family members, which reflect the gift recipient’s year. I believe every family with kids should have an inexpensive and preferably funny holiday tradition that the kids and adults look forward to experiencing annually. And even if you have a normal tradition such as exchanging ornaments, get creative in searching out that one-of-a-kind piece.

One great way to decide on your annual holiday tradition is to ask your kids what they most remember about Christmas last year. If it was going out and getting the Christmas tree, then perhaps your tradition is a tree-trimming party. If what was most memorable was going out to breakfast in new flannel pajamas on Christmas morning, perhaps there is now the annual Christmas Eve gift of new pajamas for everyone.

2. Give The Gift Of Gratitude, Not Guilt.

Family members can give a group gift instead of individual gifts. For example, save money by getting one gift for Dad that’s from Mom and the kids, or a gift for each of your children that is from Mom, Dad, grandma and grandpa. Holiday fun can quickly turn into holiday remorse if family members try to one-up each other on the gift giving. If individual gift giving is practiced, make it an even playing field when buying gifts for kids by setting a dollar limit that everyone can spend on the children. Tell children that the most important thing is that you are together as a family. Model gratitude for your children by placing a priority on the connecting and spending time with each other rather than a frenzied focus on what we’re getting each other for Christmas.

3. Have a Christmas Budget Family Meeting.

How many times has the reasoning behind your child’s Christmas list been “Dear Santa: I don’t know why I want this but I just do!” You must investigate why your children are asking for certain items in order to determine what’s really important to them and what will work with your budget. If you plan a family meeting where you are going to be open and honest and talk to your kids about having to scale back on holiday purchases, you’re teaching them self-discipline and you can discuss the bigger picture of what you want as a family. Wouldn’t it be nice if we could spend more time together versus working harder to pay off our Christmas purchases?

Kids have plenty of creative ideas and it can empower them and make them want to get on board when you ask, “What do you think we can do to get out of debt, or not go into debt, as a family this year at Christmas time?” Make a Christmas list right after Thanksgiving, during the biggest shopping weekend of the year, and then put it away for a couple of weeks. When as a family you revisit the list, narrow it down to the three things your kids really want. Then, talk to them about why they want something: What’s so special about this? It doesn’t hurt to quiz them a little to understand if it’s truly something they can’t live without.

4. Teach Children The Meaning Of a “We” Not “Me” Christmas.

The holiday season is a wonderful opportunity to teach children about the power of giving of themselves to help others. Inspiring children with the story of Kris Kringle, a child who liked to give more than he liked to receive is a great start. Explain to your children why it’s important to give to others as a family and select a charity that you want to support, either with your time or money or both. Make it a family weekend project in November to start collecting hand-me-downs from everyone’s closets that you plan to give away to charities at Christmas.

5. The More Mini-Moguls, The Merrier.

When you buy a financial investment for your children, it is a gift that can educate your children as well as entertain them forever. Children have the gift of time, and there is no better time then now to invest in your child’s financial future. Children very rarely remember the gifts, but for years to come they will be thanking you for investing in their financial future. Family members can open a high interest savings account, like ING Direct’s Orange savings. Sharebuilder for stocks is a great way to get kids started in buying individual stocks through dollar cost averaging. Start teaching children the value in saving and investing money early, because as we have learned over the last year, when you have the security of money in the bank it’s your number one asset.

Source: filife.com