One of the first rules of acquiring financial wealth is that you must be able to accumulate more resources (money) than you expend. Really, it’s that simple. If you spend less than you make, you will accumulate more. Part of the trick of wealth accumulation involves making your money work for you. A dollar in a savings account will gather interest and ultimately make you wealthier than if you stuck that same dollar in a mattress.
But one of the surefire ways to lose wealth to have your dollar in a bank making money for someone else, while you are deprived of the right to use your money as you see fit. Permit me to give you an example:
Let’s say that you want to buy a paper shredder and you have found the make and model that you want on sale at three different stores.
Store A offers the shredder for $95. Store B offers the same shredder for $120 with an instant $30 rebate at the register. Store C offers the same shredder for $100 with a $25 Rebate Visa Prepaid Card. Which one do you buy? Well, if all things are equal, simple mathematics tells you that the price of the shredder at the register is $95.00 in store A; $90.00 in store B and $100 in store C. My advice is buy from store B. But don’t hesitate to ask Store A or B if they will price match store C – AT THE REGISTER!
But wait, you might say – what about that $25.00 rebate Visa card? Doesn’t that make the price $75. Well, here is the deal about that prepaid Visa card, particularly if it comes from Staples – it is not a credit card. It is a debit card loaded with $25.00 of your cash. The card does not have ATM access and can not do cash withdrawals or cash back purchases. Finally, if you do not spend your $25.00 within six months, the company issuing the card will subtract $3.00 a month from your card balance as a handling fee until your money is gone. In short, in our example, at store C, you paid $100 at the register for a $90 shredder (Store B’s price) and in the process converted $25.00 of your money into a restricted exchange form that you must use in six months or pay liquidation fees. The only loser in this transaction is you because you lost the flexibility to use your money as you see fit. Staples gets full use of your $100 which will gather interest for them for a few weeks before they transfer $25 to the card issuing company, who will bank that money while they wait for you to use the card and penalize you if you don’t use the card within six months.
Yup, Staples, I agree with you. It was easy! It certainly is for you. For consumers – not so much.
Bill
You had me at “example”. 🙂
Honestly, I’d go wth B just because I never remember to send in rebate things at the proper time. If they sent it in for me, then I might consider C because I spend gift cards as soon as they come in.
🙂
I have no problems with rebate paperwork, but from now on I want a price reduction at the register or a check that I can cash or deposit in my bank as I see fit. Not allowing you to deposit YOUR money in a bank where it can work you is just wrong. From now on, when I buy at Staples, I will discount the rebates in my shopping.