Brand loyalty happens to the best of us May 31, 2009

Last weekend, I realized I was running low on all sorts of things that a drug store would be good for.  Moisturizer, deodorant, sunscreen, nailpolish remover, etc.  I walked over to the nearest store, a CVS.  I went in and tried to figure out what I needed.  For the nail polish remover, I went with the CVS brand (and picked up one of those super cheap nail polishes, as I just want to have cute looking toes).  But when it came to the moisturizer, they didn’t have what I wanted.  Now, usually, I’m not that picky about products (at least, that was what I had assumed).  I had tried a certain brand of face lotion (and an accompanying face scrub) when I signed up for a BzzAgent campaign.  For this campaign, they sent full samples of the products, as well as coupons and info about the products.  I tried them and liked them.  At some point, I lost the moisturizer (I think I took it on a trip home and lost it), but I had really liked using it.  I’ll admit, I’m not very good at the BzzAgent word of mouth promotions, as I end up feeling weird telling people about products (or in this case, talk about the product long after the campaign is over).  But I didn’t think that the free trial would hook me.  But when I went to CVS, they didn’t have it.  And I figured I could just get something else, but the brand had already decided for me:  I knew it was good, and I had no way of knowing how the other products were.  I think I might have just gone ahead and bought something, but then I went to the deodorant aisle, and they didn’t have the brand I like there, either!  And after realizing I was 0 for 2 on the main products, and realizing that all I wanted was a store brand (i.e. cheapest) 30 SPF waterproof sunscreen (which was not readily available for some reason), I gave up on buying any of the products (well, I bought the cheapo nail polish remover and nail polish because it wasn’t going to matter where I bought it).

I walked back home, and debated driving to the grocery store.  I felt kind of silly wanting to get into my car to get a few items that I could have gotten at the store if I wasn’t so picky.  My boyfriend suggested I walk there, since it’s not far.  Which was the obvious thing to do, but I had been worried about how much time it would take (we had plans for later that day).  Anyway, I walked to the grocery store and found the deodorant, lotion, store brand sunscreen, and some toothpaste (I knew there was something else I was running low on).  And the toothpaste?  It was a brand name, and likely the one I had bought in the past.  Picked up a quarter of a watermelon (impulse buy) and bought everything for my walk home.

This really got me wondering…how did I become loyal to so many brands?  For the lotion, it was obviously because I had tried it and liked it.  However, I think many products gain my loyalty by being the cheapest.  If they’ve been the cheapest all along (like the Suave deodorant, unscented please!) I end up buying it because I know it’s a good deal.  Some products (like those for, um, women) I used to buy whatever was cheapest (but a brand name), and now I automatically buy that brand.  I’ll buy 2-in-one head & shoulders, either brand name or store bought, but I don’t bother with other types of shampoos/conditioners (unless I get enough scolding from friends who think I need to do more for my hair).  And for pain pills, I’ll buy the store brand, because I really only care about the active ingredients present.  But I’ll buy naproxen sodium (generic Aleve) over aspirin, acetaminophen (generic Tylenol) or ibuprofen (generic Advil or Motrin).  Again, I buy what works best, but this time I don’t care about what brand it is.

As a personal finance person, you’d think I would just buy whatever is the best value.  I think, for the most part, I do.  It seems that I get used to buying the same brand because it’s consistently the cheapest.  I think I am more willing to buy store brands for food items (or like medicine, where the active ingredient is the key factor), but for personal care/beauty, I tend to be a bit more picky, even if it’s irrational (but really, only for certain items).

Do you have a lot of brand loyalties?  Do you end up spending more because of it?  Or are you like me and (for the most part) have inadvertent brand loyalties based on their consistent value over other products?  What brands do you HAVE to have, and what are you willing to buy in the store brand? (which, sometimes, is made by the same company as the name brands, but that’s another topic for another time)

Credit Card Trickiness May 19, 2009

There’s been a bit of a hubub on the internets regarding the new changes to the Chase Freedom credit card.  The changes, which Chase claims are “benefits”, are really just them cutting back on how much cash-back you can get.  The “improvements” are now that your rewards points don’t expire (apparently they used to), the bonus categories for everyday spending are being eliminated, and being replaced by quarterly bonus categories (likely not the ones you spend the most in), and they are eliminating the bonus $50 that you get when you redeem $200.  Those all sound like downgrades to me.

Some of those changes make the card seem more like the Discover cards, which have revolving bonus categories, though these bonus categories provide a 5% cashback rather than the 3% from Chase.  Then again, many places don’t accept Discover.  So I don’t know if it would be in my best interest to get a Discover card.

In general, I’m pretty much convinced I don’t need any more credit cards.  I got a few after I graduated college to start building my credit.  I got an offer or two for the Chase Freedom card, and accepted it (both for the better rewards program and a nice $100 bonus).  I have a few store credit cards as well. (I know, everyone says they’re the worst thing to have, but I have them for the two stores I shop the most in)

I really would like to cancel one of my earlier cards, which I’m guessing I could do without hurting my credit too much (since both of my first cards were started around the same time).    I just want to eliminate unused cards, but keep my history.

The other thing I’ve thought about is how the cashback from different credit cards probably doesn’t matter that much.  I’ve read about a lot of different people who try very hard to maximize their cashback.  They’ve got multiple cards that they use for different categories.  I suppose that I could start using a card that gets me higher cashback for my most common purchases (groceries, gas, restaurants).

In the end though, does it really matter?  I still pay some bills by online transfer (rather than by credit card), so I’m not chasing after every dollar of cashback money.  Looking back, I don’t spend so much on credit.  If we want to get crazy, we could pretend that I spend $6000 on my credit card every year.  I think that number is way too high, but that’s going on a $500/month assumption.  With a 5% cashback, I’d get $300 back.  While that’s not chump change, it’s not a ton of money.  So going through the hassle of figuring out which card to use at what merchants really doesn’t seem worth it.

I’ll still continue to use credit cards for most of my expenses for the minute amount of cashback I get, and to help me track my expenses.  I know that sometimes I’ll spend more having cash than credit (special thanks to my company dining program now accepting credit cards), but for the most part, my usual purchases aren’t that high (groceries) or are really out of my control, spendingwise (gas…I’m stuck putting gas in my car at whatever price is out there).  I think I’m going to go back to paying cash for lunch at work (or get better at bringing lunch), since I think I’ll be more likely to spend less seeing the money actually leaving my wallet.

How many credit cards do you have?  Do you strive to earn as many points/miles/dollars as possible?  Or do you just see the points etc. as a nice bonus for using a card you’d use anyway?  Do you find yourself spending more when you’re using your credit card?

I want to buy a house…maybe May 6, 2009

About a month ago, I started scrolling through listings at realtor.com to get an idea of what is out there:  What can I get?  How much will I have to spend?  I started fantasizing about owning my own place.  Took out a few books on home buying from the library.  I even went to a seminar hosted by work for first-time home-buyers, where I got a better idea of what the home buying process entails.

I’m hearing a lot these days about why now is the “perfect time to buy a house.”  Interest rates are low, there’s the first time home buyer tax incentive, and house prices have dropped significantly.  We’re also reminded that you claim points and paid interest on your taxes, likely providing yet another tax incentive.  Sounds like nothing should hold me back, right?

Of course we know it’s not that simple.  Now is the time to buy IF you were planning on buying now.  I hadn’t really planned to buy anything until further down the road of my financial, personal, and professional life.  I mentioned a while back that my financial priorities are first to eliminate my student loans and car debt prior to getting involved in a mortgage.  My student loan rates have dropped pretty low, so a mortgage would probably be at a higher interest rate.  Plus I’d like to have more money for a down payment, which is counter to my desire to use extra savings to pay down student loan debt.  And I’m not super keen on getting financially locked into a place (it’s a relatively non-liquid asset).  I also figured I wouldn’t buy a place until I got married.  But more and more people are buying for themselves, or as unmarried couples.  And I don’t know if I’d have to move for my job.  And of course, we don’t know how much more house prices might drop.

I also know that right now, the place I could afford would be small…a “starter home”.  And I know I have an image in my head of what my future home should look like.  How easy would it be to sell the starter home to buy a different place?  It’s not as easy as it used to be…

Anyway, in the meantime, we’re going to keep looking at listings casually, and I’m going to default to saving/paying off debt for a while.  I’ll keep reading books, and check out websites with helpful information.

What’s your plan?  What do you think I should do?  Is now the time to buy?  Or should I wait to buy a bigger and better place in the future?  And where else should we be looking for information?