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Showing posts with label Credit Cards. Show all posts
Showing posts with label Credit Cards. Show all posts

Friday, September 30, 2016

Why You Should Use Credit Cards...

Is Using Credit Cards a Good Idea?

Yes, if you do it right...

Why using credit cards is a good idea
Why Using Credit Cards Is a Good Idea

One of the most controversial topics I have covered on my blog or in my books about saving money is credit cards.  Apparently suggesting that people use credit cards seems like bad financial advice!

I agree that using credit cards to buy things you can't afford can lead to financial disaster.  Even if you can make the minimum payment on a credit card balance, it can take around 20 years to pay off a credit card debt!  Over this time, the interest charges keep on piling up and you end up paying a very high price for whatever it was that you charged 20 years ago...

But that is not how I suggest using credit cards as part of a smart personal finance strategy.  I merely suggest taking advantage of the perks of using credit cards without paying anything.  How can you do this?  Easy- just pay your balance in full every month (or actually more like 25 days with most cards now).

For example, I was at Target with my wife buying some grocery items.  My wife had enough cash in her purse to pay for the items.  I had enough cash in my wallet to pay for the items.  But I whipped out a credit card to pay.  Why!?

Because I could save 5% off my purchase by using my Target card.  When the Target bill comes, I will pay the balance using the electronic bill pay feature from my credit union.  The result is that I just saved 5% and it didn't cost me anything.

I do the same thing at Lowes by using my Lowes credit card to save 5% on everything I buy there.  As long as you don't buy more stuff than you otherwise were planning to buy and pay your balance every billing cycle, you really do save 5%.

I sometimes use a credit card with rewards to make other purchases.  With the rewards on my credit card, I can get pretty much anything I want from Amazon for free.

So when I say to use credit cards, I mean to use them to save money- not to spend money!

Here is one of my statements about using credit cards that caused a kerfuffle:
Tip 15: Use Credit Cards


Copyright © 2016 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Wednesday, December 23, 2015

When Using a Credit Card is Good...

Did You Just Say To Use Credit Cards More?!

Sometimes You Can Save Money By Using a Credit Card!

After my second book came out about a year ago, some frugal readers were not impressed with my advice to use a credit card that has a good rewards program for purchases.  The advice in question is contained in Tip 15 of my free eBook: Pinch Like You Mean It! 101 Ways To Save Money Now.

My logic is that if you are going to make a purchase, you might as well get as many points as you can and effectively reduce the cost of your purchase.  My rewards card gives points that I can use to buy anything on amazon.com.  I use my points to get things for free that I would otherwise pay for, saving me hundreds of dollars every year.

Another benefit is that using a credit card is more secure than using a debit card or other forms of payment in case of fraud or payment dispute.  I have been able to have charges removed from my bill a couple of times, saving well over $100.

The point that some of my disappointed readers made can be summed up as:
 "Credit cards are bad.  It is stupid to give advice suggesting to using credit cards."


I think credit cards are bad if you use them to buy things you don't need or to spend more than you can afford.  However, I stick with the conclusion from my book- you can come out ahead using a credit card with a good rewards program if you stay within your budget and don't run up a balance.

I use a Citibank Visa card.  There are other good choices available.  If you are paying your balance off every month, then you don't need to worry about the interest rate on your credit card.

Another way to save money using credit cards is using a store credit card for a cash discount.  I get 5% off of every purchase at Target and Lowe's by using my store credit cards.

I bought a refrigerator at Lowe's with my store credit card and the 5% discount amounted to some big savings from just this one purchase!

Even smaller purchases of groceries and other items at Target add up over time.  Why not take 5% off if it doesn't cost anything.  I always pay off my balance on these cards, so I have not paid any interest or fees.

If you can pay off your balance, why not take advantage of credit card rewards and discounts on purchases?  The credit card company is betting that by offering perks that they can get you to buy more things and to pay interest on a credit card balance.

Prove them wrong and take their money!

Copyright © 2015 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Thursday, January 15, 2015

State Farm Credit Card- Looks Like a Good Deal!

State Farm Credit Card Offer

State Farm Credit Card- It's a Good Offer
State Farm Credit Card- It's a Good Offer
Image Source: Dr. Penny Pincher


I get several credit card offers per week in the mail- sometimes even more than one per day.  Today I received a credit card offer that is a really a good deal.  It is a Visa State Farm Credit Card.  The offer was 2 years at 0.9% interest on balance transfers AND there is no balance transfer fee AND there is no annual fee.  Almost all of the credit card offers I get have a 3% balance transfer fee.  This would mean that if you transferred a $10,000 balance the fee would be $300.  I recycle any offers that charge a balance transfer fee.

The rate on purchases is 12.9% and the 0% introductory rate goes up to 12.9% after 2 years.

The State Farm Credit Card also has a benefit that you can get cash back if you use the State Farm Credit card to pay your State Farm Insurance bill.  The offer I received was a "pre-screened" offer that came in the mail.

Save Money on Your Insurance Bill- Use a State Farm Visa
Save Money on Your Insurance Bill- Use a State Farm Visa
Image Source: Dr. Penny Pincher

Of course, 0% interest would be even better than 0.9%, but you wouldn't pay much for interest compared with a $300 balance transfer fee.  The interest on a $10,000 balance transfer would be about $90 for 2 years if you pay it off.  If you check my math, it might not look like this adds up, but if you steadily pay down the balance over 2 years, the average balance would be $5,000 for 2 years.


This Is What a Good Credit Card Offer Looks Like...
This Is What a Good Credit Card Offer Looks Like...
Image Source: Dr. Penny Pincher

Seeing this credit card offer reminded me of a good way to save money on high interest credit cards- transfer balances with high interest rates to cards with low- or zero- interest and get them paid off.  Watch out for the transfer fee, which is typically 3% of the balance.  Also watch out for annual fees- some cards charge an annual fee of $50 or more, which I try to avoid unless the card has a really good points or travel miles program that offsets that cost.

If you have a credit card balance with a high interest rate, look for a deal like the State Farm Credit Card with $0 balance transfer fee, no annual fee, and a low interest rate.

Copyright © 2015 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Saturday, August 31, 2013

Old Navy Credit Card Tips

How to apply for an Old Navy Credit Card

Old Navy Card and Old Navy Visa
Image Source: Dr. Penny Pincher

You can apply for an Old Navy credit card at the store or on-line.  On the Old Navy credit card application, you will need to provide your name, address, e-mail address, net annual income, and length residing at current address.  Also required is your date of birth and social security number on the application.  You'll find out in a few minutes if you are approved.  You can be approved for an Old Navy Card- a store credit account that can be used for purchases only at Old Navy and related stores, or for an Old Navy Visa- a credit card which can be used anywhere Visa is accepted.

What credit score do I need to get approved for an Old Navy credit card?

You'll likely need a credit score of 600 or higher to be approved for this credit card, although data shows that some applicants are approved with scores in the 500-600 range.

Old Navy credit card interest rate and credit limit

The credit limit on an Old Navy credit card varies from person to person based on income and credit score.  A credit limit in the range of $300 to $3,000 is the most likely.  The current interest rate on Old Navy credit card is 24.9%, so you won't want to carry a balance on this one.

Old Navy- Bargains Await!
Image Source: Dr. Penny Pincher

Old Navy Card Discounts and Benefits

If you are approved for an Old Navy Card or Old Navy Visa, you can get 10% off all of your purchases that day.  This discount can be combined with one other discount as well.  

The current offer also includes a 10% savings pass good for 10% off for the first 60 days after you get your card.  After you have an Old Navy card, you will get offers and discounts in the mail.

Other Old Navy card exclusive discounts include:
  • Rewards program- get a $5 reward for every $100 spent at Old Navy, Gap, Banana Repbulic Piperlime and Athleta
  • With Old Navy Visa, earn a $30 bonus when you use your Old Navy Visa outside the stores listed above
  • 10% off on Tuesday (both in store and on-line)
  • Birthday discount- $15 off
  • Bonus point days- earn extra rewards by making purchases on specific days
  • Seasonal discounts and promotions will be sent to you throughout the year

Can you use an Old Navy Card at other stores?

The Old Navy Card is a store credit card and can only be used at Old Navy stores and other brands in the Old Navy family.  The Old Navy Visa credit card is a Visa credit card and can be used anywhere Visa is accepted.

The Old Navy Card/Old Navy Visa program is similar to the Gap Credit Card program.

Get an Old Navy Credit Card at Old Navy stores
Image Source: Dr. Penny Pincher

Old Navy credit card- Should you get one?

Pro:  You'll save 10% on your purchase if you get an Old Navy card, plus you'll get 10% off for 60 days as well as other special discounts and offers.  If you get an Old Navy Visa card, you can get rewards for using your card every day.

Con: At 24.9% interest, you'll want to make sure you pay this card off every month.  The rewards and discounts will quickly get wiped out by interest payments if you carry a balance.

If you shop regularly at Old Navy and will pay off the balance on an Old Navy card every month, then getting and Old Navy card could be a good deal for you.


Recommended Reading
Kohl’s Credit Card: Get Kohl’s Cash and Kohl's Discounts


Copyright © 2013 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Sunday, August 25, 2013

Does Closing or Cancelling Credit Cards Help Your Credit Score or Hurt Your Credit Score?

Should You Cancel Old Credit Cards?

Choosing a credit card from a wallet
Should you keep all those old credit cards?
Image Source: Public Domain Image by LaTunya Howard

A lot of people have credit cards around that they no longer use.  These may be credit cards that you have paid off long ago, or credit cards that you received but never used.  It seems to make sense to cancel old credit cards that you don't need.  But closing credit accounts can reduce your credit score.  It may sound counter-intuitive, but keeping your old credit card accounts open may be your best move to keep your credit rating high.

How Credit Cards Contribute to your Credit Score

Two major categories of the FICO score that are impacted by credit card accounts:

  • Length of Credit History which makes up 15% of your FICO score
  • Amounts Owed, which makes up 30% of your FICO credit score 

The purpose of the FICO score is to allow lenders to evaluate the risk of loaning you money.  If you have a long history of credit accounts, this will build your FICO score through the Length of Credit History scoring.  Financial institutions like to see a long history of credit utilization- the longer the better.  Some of the metrics used to compute the FICO score involve parameters such as the average age of your credit accounts.  For this reason, consider keeping older credit card accounts open.  Accounts that you have had for a long time contribute more to your credit rating than newer accounts.

The Amounts Owed metric is also impacted if you close a credit account.  Your FICO score will be higher if you have a higher ratio of available credit to amount owed.  If you cancel a credit card, you will lower your available credit suddenly.  Banks like to see available credit since it is less likely that you will max out if you have plenty of credit available.  It also gives reassurance that other lenders have given you substantial credit accounts.


Back of Credit Card
Image Source: openclipart.org by jmlevick

Can Closing Credit Card Accounts Help Me Get a Loan?

If you have multiple credit cards like most people, closing one account shouldn't make a big impact on your credit score- but if you are nearing a large loan such as applying for a mortgage, it may be wise to hold off on canceling any credit cards.  Since 45% of your FICO score could be impacted by closing credit card accounts, you should close accounts gradually rather than closing several during the same month.

In some cases, if you have too much credit available for your income level, it may help secure loans if you do close unneeded credit card accounts.

How Many Credit Cards is Too Many Credit Cards?

The purpose of your credit score is to allow lenders to evaluate the risk of loaning money to you.  Generally having lots of available credit is a good thing.  This will allow you flexibility in managing your debts and you are not likely to max out an account or have trouble paying.  However, based on your income, your available credit can reach a level where your FICO score will decrease based on risk increasing.

What if something happens and you max out every credit card you have available?  Perhaps you spontaneously decide to take a European vacation, or an expensive medical issue occurs.  Would you be able to make minimum payments on all of your cards with your current income?  If not, you are getting to an amount of available credit that would be perceived as a risk by lenders and may begin to reduce your credit score.

How many credit cards is too many?
Image Source: Lotus Head CC-SA-30


For example, if you have 10 credit cards with $10,000 limits and you max all of them out, could you make $200 per month minimum payments on 10 credit cards?  This would add up to $2000 per month.  If this would be outside of your financial means, consider reducing some of your newer credit card accounts to lower your available credit to a more reasonable level.

Should You Keep Old Credit Card Accounts Open?

For most people, your credit score will benefit by keeping old credit card accounts open, even if you have no intention of using them.  Keeping old credit card accounts open builds your credit history and maintains your available credit- both factors that boost your FICO credit score.

Should I Close Unused Credit Cards with Annual Fees?

If you have multiple credit cards and have one or two with an annual fee that you are not using, it probably makes sense to close the credit cards with an annual fee.  Sometimes there are ways to avoid the annual fee on credit cards and keep your credit card.  It is best to close credit card accounts gradually, rather than several within the same month to preserve your credit score.


Sunday, July 7, 2013

Kohl’s Credit Card: Get Kohl’s Cash and Kohl's Discounts

Kohl's Credit Card- The Key to Savings at Kohl's


Shows peeling to reveal a 15% off Kohl's coupon
How to Save Money at Kohl's
Image Source: Dr. Penny Pincher

Kohl's is where most of the new clothes at the Pincher household are purchased because Kohl's has some excellent savings programs. Applying for and getting approved for a Kohl's credit card is the place to start to get all of the discounts and savings programs. You can ask to apply for a Kohl's credit card at a Kohl's store at the checkout. You can get approved on the spot and be issued a temporary shopping pass if you want to use your Kohl's credit card for shopping right away. You'll need a Drivers License or other photo ID and you'll need your social security number to apply.



Kohl's store at night
Use Kohl's Credit Card to get bargains at Kohl's
Image Source: Dr. Penny Pincher

Kohl's Cash- Even better than Kohl's Credit!

A savings program with a name like Kohl's Cash gets my attention. Kohl's Cash is a special type of coupon that you get by shopping at Kohl's. You can get $10 in Kohl's Cash for every $50 that you spend. The Kohl's Cash is valid for a limited range of dates, typically 11 days. You can't use Kohl's Cash on the same shopping trip that earned the Kohl's Cash- the Kohl's Cash must be used on a future date.
One issue with Kohl's Cash is that it does expire. You must use it by a certain date, or it expires. I have had Kohl's Cash expire a couple times when I forgot that I had it, or simply didn't get back to Kohl's in time to use it. Since Kohl's sells many types of items from clothing to household goods to toys and even some food items like Keurig K-cups and Sodastream syrup, there is always something you can find that you need when you have Kohl's Cash.

Photo of Kohl's cash certificate for $10
Kohl's Cash- Free Shopping at Kohl's!
Image Source: Dr. Penny Pincher


Why does Kohl's give away cash?

Why does Kohl's give away Kohl's Cash? The answer is to bring their best shoppers back to the store! If you spent $50 or more at Kohl's, they would love to have you come back since you are likely to buy more. Your potential as a shopper is amplified even more if you have a Kohl's credit card to tap into to buy bargains at Kohl's.
I recently went to Kohl's with $20 Kohl's Cash to pick up a pair of shorts. I ended up with 2 pairs of shorts, and my wife got 3 shirts. All good deals, but we spent $50 on a trip to Kohl's that we would not have otherwise made. This is a good strategy for Kohl's, and it is also good for shoppers- I did save $20 on my shopping bill.

Kohl's Discounts: 15%, 20%, or 30% off!

Now for even more savings- Kohl's Discounts. If you have a Kohl's Credit Card, you'll regularly get mailings with a peel-off sticker that reveals your savings. You can get 15%, 20%, or 30% off. The discounts are a percentage off of the regular store prices, which already seem pretty good compared with department stores like JC Penny, Younkers, Sears, Dillards, etc.
The Kohl's discounts are sometimes good for one day, or sometimes can be reused for a couple weeks before they expire, I always have a Kohl's discount coupon tucked away just in case we end up at Kohl's. One downside of getting used to always having a coupon at Kohl's is that it just feels wrong to go to Kohl's without one.
When you peel the sticker from the Kohl's advertisement and get a 30% off discount, it feels like you won something. Getting a 30% coupon is significant savings and I try to have at least a 20% discount coupon in hand before I go shopping at Kohl's.

Photo of Kohl's discount coupons
Kohl's Discounts: save 15%, 20%, or 30%
Image Source: Dr. Penny Pincher

Use a Kohl's Credit Card, Kohl's Cash, and Kohl's Discounts to Save Money

Here's an example of how using savings programs at Kohl's can save you money when you shop at Kohl's: I had $20 in Kohl's cash from a recent shopping trip to Kohl's to get clothes for my growing kids. I wanted a pair of shorts and my wife came along to help me find some that were not too embarrassing. I also had a 15% off coupon.
I bought 2 pairs of shorts for myself and my wife bought 3 shirts. Kohl's has lots of great stuff!
At checkout, the cashier will tell you how much you saved and it's printed on your receipt. For example, I had $20 Kohl's cash and a 15% off coupon. The cost was $53.12. I "saved" $93.89 with price discounts, 15% off, and Kohl's cash. My receipt lists this total saved, and the cashier circled it in red pen. I know the savings is somewhat inflated since almost no one pays full price, but it does make you feel good about shopping. I also picked up $10 more Kohl's cash that I can use on a future shopping trip.

Shopaholics Beware... Kohl's Bargains may be too good!

Kohl's is very good at offering great deals and getting you to come back to the store and see the great deals. They make it easy to charge on your Kohl's credit card- you don't even need to have the credit card with you. They will look up your account if you show them a photo ID and type your social security number in the credit card machine. If you have trouble overspending at stores, you may want to be careful. Kohl's got me to come in with $20 Kohl's Cash, and I ended up spending that plus $50 more!





Copyright © 2013 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Saturday, March 16, 2013

United Credit Card: How I Avoided Paying the Annual Fee and Kept my Miles

United MileagePlus Explorer Card


Picture of credit card
United Airlines Explorer Credit Card
Image Source: Dr. Penny Pincher
Updated August 12, 2013

The United Mileage Plus Explorer Credit Card is a credit card that provides 30,000 bonus miles when you charge $1000 during the first 3 months.  Additional miles are awarded as you continue to make purchases with the United credit card.  


The $95 annual fee is waived the first year.  The credit card is a Visa credit card from Chase (JP Morgan Chase bank).  


When I got my card about a year ago, there was a special offer that allowed me to get 30,000 miles by making a single purchase after receiving the United credit card.  How far can you go for 30,000 miles?  This is about enough for a single domestic flight on United.


United MileagePlus Explorer Card: 30,000 Free Miles and an Annual Fee

I was easily able to obtain the 30,000 bonus miles as promised after getting my United Explorer credit card.  After reading the fine print, I realized that:

  1. There is a $95 annual fee every year, except the first year
  2. Upon closure of the cardmember’s MileagePlus Explorer Credit Card account, all benefits will be canceled.

One strategy to deal with the annual fee would be to use your miles in the first year, then cancel the credit card before the first $95 annual fee is applied to your account.

However, I did not need to fly during the first year and I want to have some miles available in case I wanted to fly somewhere.  Paying $95 per year to keep miles that I may or may not use did not make sense.  How can I keep my miles, but avoid paying the annual fee?

My initial understanding was that item 2 from the fine print above meant that if you cancel your card, you'll lose your miles.  After further review, I realized that the "benefits" are separate from the bonus miles.  So one way to avoid the annual fee is to simply cancel the card before you get billed for the 2nd year annual fee whether you have used your miles or not.  Apparently you get to keep your points even after you cancel the card!

How to Avoid the Paying the United MileagePlus Annual Fee

There are reasons you may not want to cancel the United credit card, though.  If you have a balance and do not want to move it, or if you want to keep the card to earn more miles in the future, it may be worth keeping.  Also, canceling a credit card with a big limit can reduce your credit score under some circumstances.  So how can you avoid paying the $95 annual fee and keep your United credit card?

I called Chase to request that the annual fee be waived this year.  I figured it was worth a try.  The response was that they do not waive annual fees on mileage credit cards.  However....

They informed me that I could apply some of my miles to pay the annual fee.  I had about 30,000 miles on the card.  It takes about 12,000 miles to cover the $95 annual fee.  This would allow me to keep 18,000 miles after paying the annual fee by redeeming miles.   I prefer this approach over canceling the card because:

  1. I can keep most of my miles
  2. I avoid the impact on my credit rating on canceling a credit card with a large credit limit

The person on the phone set me up with a PIN that I can use at united.com/chase to apply my mileage points to cover the annual fee.  Navigate to the points redemption page- there are standard options on the website for using miles to pay your annual fee.  You  can wait until the annual fee shows up on your billing statement and then go to the website to redeem miles to pay it.

Using points to cover the annual fee makes much more sense for me than paying the $95 annual fee with cash.  This will allow me to keep 18,000 miles I have remaining and perhaps even accumulate more miles if I keep using the MileagePlus credit card.

Penny Pinching Tips:

  • You can essentially get a free flight using bonus miles from a United MileagePlus Explorer Credit Card
  • Watch out for the annual fee: Either cancel your card before the annual fee hits your account at the end of the second year, or use about 12,000 of your miles to pay the annual fee instead of paying cash if you want to keep your card
  • It might be worth paying $95 in cash instead of miles if you want to keep your United Explorer Card and you are very likely to use your miles- 30,000 bonus miles gets you a free trip, 18,000 miles may not get you anywhere...


Recommended reading:




Penny Pincher Journal
Copyright © 2013 Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy



Friday, March 8, 2013

GAP credit card: GAPCARD rewards at Gap, Old Navy, and Banana Republic


Gap Credit Card


When buying some clothes at the Gap store in the mall for my son, I was offered the chance to sign up for a Gap credit card and save 15% on my purchase.  Since this amounted to about $10 of instant savings, I was interested.  The GAPCARD is a savings program that includes other opportunities for discounts and rewards including:

  • 15% off initial purchase
  • 10% off Tuesdays
  • Special Ads and coupons
  • Extra 10% off for first 60 days
  • Earn $10 Reward Card for every $200 spent at Gap, Old Navy, and Banana Republic



Gap Storefront in shopping mall
Save Money at the Gap Store with a GAPCARD
Image Source: Dr. Penny Pincher

Bonus offer- $30 Store Credit

When I received my Gap credit card in the mail a few days later, the envelope include an offer for $30 store credit if for using the card outside of Gap/Old Navy/Banana Republic within 30 days.  The Gap credit card is a Visa card and can be used anywhere Visa is accepted.  I plan to use it to buy gas tomorrow and book the $30 in store credit.

Earn $10 Rewards Cards

You can earn rewards from shopping at Gap, Old Navy, and Banana Republic.  For every $200 you spend at these stores, you'll earn a $10 Reward Card.  I sometimes shop at Old Navy, and my son seems to like Gap, so earning a $10 reward seems possible.

Tuesday Discount Deals

If you shop at Gap on Tuesdays, you’ll save 10% after you get a Gap credit card, plus 10% extra during the first 60 days.  Saving 20% would merit a special trip if you are planning to buy more than one item.



One hazard of getting a credit card is ending up with a balance on a credit card with a relatively high annual percentage rate (APR).  Most cards that provide rewards and benefits have a high APR.  I plan to pay the balance off every month to avoid paying interest and fees.


How do you sign up?

Instant credit card application is available in the store.  The cashier will ask questions, and you use a touch screen to enter information to apply for a credit account.  The credit check is done within a few seconds of applying.


Gap credit card and offer to earn $30 bonus
Gap Credit Card
Image Source: Dr. Penny Pincher

What information is required to apply for a Gap credit card?

During the credit application, you will need to provide:

  • Photo ID
  • Other credit card
  • Address
  • Phone number
  • Social Security Number
  • e-mail address

Can you use account right away?

Yes, you can use the Gap credit card immediately if you are approved.  You will save 15% off of your purchase and the balance goes on your new Gap credit card account.


Penny Pinching Tips:

  • You can maximize this 15% discount if you apply for the card when you are making a sizable purchase anyway, for example Easter clothes or back-to-school clothes.
  • Avoid being motivated by special offers to buy more than you intend
  • Pay off the balance on your Gap Card each month to avoid interest and fees

Thursday, March 7, 2013

Sears Super Shopping: How I got 90% off at Sears

Super Shopping at Sears- Over 90% Off

They say you shouldn't go grocery shopping when you're hungry.  I guess you shouldn't go clothes shopping when you're cold...  This story has a happy ending- I got some great deals on winter clearance clothes at Sears.  

The following steps helped me save a ton on my unplanned shopping trip:
  • Finding items on the clearance rack for $5- in my size and colors
  • 5% discount using my Sears Gold Card
  • Saving $10 more by applying for a Sears Blue card 

I was able to save over 90% off original price!


Sears store at night
Super Shopping at Sears
Image Source: Dr. Penny Pincher

The Clearance Rack at Sears

I left my coat in the car and went walking around the outside of mall at lunch time.  It was sunny and looked pretty nice, but it was actually only about 20 degrees.  I decided to walk inside the mall to stay warm.  Still cold from outside, I entered Sears.  The clearance rack caught my eye.

I noticed Dockers Stain Defender long sleeve button-up shirts, regularly $50, were marked down to $5.  Sometimes I see clearance items with great prices like this, but the sizes are ridiculous like XXL-T and the colors are nearly unwearable.  Upon further investigation, I found that they had the full range of sizes and colors available for $5.  Awesome!  I picked 5 size Large with color schemes that push my style envelope a little bit, but not too much  I got some plaids and stripes, but work-wearable.  These are similar to shirts I have in my closet only much less worn out and higher quality.

Next I found a couple fleece pull-overs that were originally $50, marked down to $5.  I usually prefer the full-zip fleeces, but for $5 I can handle 1/4 zip.  I went with solid black and brown with some accent features.  There was an even more expensive brown fleece, regular price $60, marked down to $7.99 that made its way into my pile.

When Will Clothes Go on Clearance?

Updated March 10, 2013: The key to success was timing- I happened to come along at the right time.  Apparently the winter clothes were put on clearance that morning.  All sizes and styles were still available.  I stopped by again the next day, and almost all of the $5 shirts and fleeces were gone.  If you are a serious bargain hunter, it may be worthwhile to patrol your favorite store daily in early March so you can get the winter clothes on clearance.  Early March seems like the time that the stores want to put out shorts and summer clothes to sell for spring break.

Supersize Savings at the Checkout

My good fortune continued at the checkout.  The cashier asked if I had a Sears Gold Card.  I thought that I had one, so I answered "yes".  Good answer.  I saved an additional 5% by using my Sears Gold Card.  The cashier asked if I would like to save an additional $10 by applying for a Sears Blue Card.  "Yes," was the right answer to this question as well.

I purchased $410 of clothes for a total of $33.62.  I also got "Bonus Points" added to my Sears account for the purchase.  The Bonus Points can be used for future discounts.  

Percentage-wise, I saved over 90% off original price.  I realize that almost no one pays full price for these items, but this still seems like a great deal!  I also realize that I have about 2 weeks to wear the fleeces before it gets too warm, but these will be great in cold weather for years to come.  It was a worthwhile lunch break, overall.

Penny Pinching Tips

  • Keep an eye out for clearance racks at end of season
  • Pile on other discounts like coupons and credit offers
  • Buy clothes out of season to save for future seasons
  • Try to pick fairly tame style and colors so you will be more likely to wear them year after year