Consumer buying tips are good to review from time to time. Now that all of our gift shopping is out of the way, I thought I'd put up this interesting little consumer IQ test. Take this [tags]consumer-buying-tips[/tags]quick quiz to see how much you know about consumer issues, laws and scams.
Consumer Buying Tips - Questions
1. You receive a credit card offer in the mail. According to the big print on the outside envelope, the credit card carries an interest rate of 6.9 percent. Your current card has a rate of 12.9 percent. If you sign up for the new card, you will:
a. definitely save money.
b. possibly save money.
c. not save any money.
2. You are buying a new computer. You planned to charge it to your credit card, but the salesman offers a “zero percent financing” deal. He says you can buy now and take a year to pay with no interest charges. What should you do?
a. Read the contract before signing.
b. Sign up– you have nothing to lose but an interest payment!
c. Ignore the offer. It is illegal to lend money without interest.
3 The only time you can get a copy of your credit report is when you apply for a loan or
mortgage. True or False?
4. The computer salesman makes another offer. For a small fee, you can purchase a service contract that will cover the cost of repairing the computer if anything goes wrong. Should you buy it?
a. Yes. It’s worth the money to know you won’t have to pay for repairs later.
b. No. Appliances are made better now than in the past and they rarely break.
c. Probably not. The warranty that comes with your computer is probably adequate.
5. You are ordering furniture and the store requires a 50 percent deposit. What is the safest way to pay?
b. Credit Card
6. You can return anything within 30 days as long as you have the receipt.
True or False?
7. Your credit card says it has a “universal default” policy. This means that:
a. If you make a payment late to another creditor, it will raise your interest rate
b. It offers accident insurance when you rent a car.
c. If you default on your payments, it will close your account.
8. If you purchase merchandise with a lifetime guarantee, you’ll never need to buy
another one. Or, if you buy a lifetime membership to anyplace, you can use it until you die.
True or False?
9. You buy a computer and a week later it malfunctions. The computer store says it only
accepts returns within five days of the sale, and that you’ll have to deal with the
manufacturer. Is the store correct?
a. No. If an item is defective, the store must give you a replacement or refund regardless of its
b. Yes, if the store’s return policy is clearly posted or printed on the sales receipt.
c. Yes, if the item is under a manufacturer’s warranty.
10. After you sign a contract, including a contract to buy a car, you have three days to
cancel if you change your mind. True or False?
Consumer Buying Tips - Answers
1. B. The new card may be a better deal, but the lower rate might also be a gimmick. For example, the lower interest rate might only last a few months and then be replaced with a higher rate than you now pay. Before you sign up, read the disclosure box that accompanies the offer.
2. A. Often, no interest offers have strings attached. You might be charged with interest if you fail to make a payment on time or fail to pay the whole balance in the specified time frame. Be sure you understand all of the terms before you sign the contract. One other aspect of no interest promotions is that the price may be higher to compensate for the absence of interest. If you are making big ticket purchases compare the overall costs.
3. False. You can order a copy of your credit report at any time. In fact, it’s a good idea to review your credit report annually to catch mistakes or to spot signs that someone is using your data to commit identity theft.
4. C. Most consumers never use their service contracts. You’re usually better off not buying one.
5. B. It’s safer to use a credit card when paying in advance for an item. If the store should go out of business or something similar happen before you get your furniture, you might be able to get a “chargeback” from your credit card. If you paid by check, cash or debit, you might never get the money back.
6 False. Stores must post their return policies on the wall, on the merchandise or on your receipt. If the policy isn’t posted, the store must accept returned merchandise within a reasonable time period. However, a store can refuse to accept returned merchandise if that is their posted policy. Or their policy may allow you to return some items but not others.
Or, a store may charge a re-stocking fee on some items, such as electronics. All of these things are allowed under the law, as long as the policy is posted. But, if the item is defective, the store must repair the item, replace it or give you a refund regardless of its regular refund policy.
7. A. Many credit cards have a “universal default” policy. They monitor your credit file. If you are late paying any creditor, they consider that you are a higher credit risk and they will raise your rate.
8. False. From a practical point of view, “lifetime” doesn’t mean your lifetime, but the lifetime of the company from which the product is purchased. If you buy a lifetime membership to a timeshare resort and the company goes bankrupt in two years, you’re out of luck. The same is true of a product. If you buy a watch with a lifetime guarantee and the company that makes the watch goes out of business, it won’t be able to replace your watch.
When you buy any product or service, your best bet is to buy the best quality you can afford at the cheapest price from a reputable dealer. Don’t buy it until you know for sure you want it and never allow yourself to be pressured into buying anything. Take your time and make up your mind before you sign on the dotted line.
9. A. If you purchase a defective item, the seller must repair it, replace it or refund your money regardless of its return policy. All purchases, except used cars that are more than six years old, have been driven more than 60,000 miles, and are sold “as is,” are covered by an implied warranty that goods are in operating condition and will continue to work for a reasonable period of time. Even when an item is covered by a manufacturer’s warranty, you can insist that the retailer give you a replacement or refund.
10. False. There are a few transactions for which the law allows a cancellation period (such as a door-to-sales or health club contract), but most contracts are binding when you sign them. The often-repeated myth that you can cancel a signed contract has given many consumers a false sense of security when making an expensive purchasing decision, like buying a new car.
Consumer buying tips are much more important than my last regifting post. I was a bit rushed for time on Christmas Eve and wanted to put something up. Hope you found this information more useful!