Be wary of Black Friday deals, says Edmonton debt expert
'It’s nice to have a nice, shiny object, but at the end of the day you’re going further into debt'
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Black Friday deals aren’t always what they seem.
That’s according to an Edmonton debt expert who is encouraging shoppers to take part in Buy Nothing Day instead of lining up for blockbuster sales.
“A lot of it is impulse spending,” said Zaki Alam, a licensed insolvency trustee at MNP Ltd.
“It’s nice to have a nice, shiny object, but at the end of the day you’re going further into debt.”
Alam said people often see low prices and buy things they don’t need on their credit cards, without thinking about how they will pay them off in the future.
While the initial price may have been cheap, shoppers often wind up paying 20 per cent interest on their cards.
Alam said MNP sees a spike in insolvencies every spring, and attributes much of it to impulsive Black Friday and Boxing Day shopping.
“People by then just realize how far deep they’ve gone into debt and they’re having difficulty even paying back the minimum amounts,” he said.
Alam said Albertans should be especially wary of in-store credit cards, which will allow people who have maxed out their own cards to still make purchases.
The number of Albertans in debt jumped dramatically in 2016, with a 39 per cent increase in people who are more than three months behind on their payments.
An Ipsos poll from August 2017 showed most Albertans were not in a situation to cover unexpected expenses, like car repairs, without going into further debt.
Despite this, many will run out on Black Friday to buy a newer version of something they already have.
“Maybe it’s peer pressure, or they want the latest and shiniest, or they want to treat somebody. Those are the kind of things – keeping up with the Joneses or whatever,” Alam said.
A recent Ipsos poll conducted by MNP shows some people might be getting the message, however.
The poll found 66 per cent of Albertans plan to cut back on holiday spending this year.
For cautious spenders, the Kiwanis Club of South Edmonton is bringing back its annual Buy Nothing Day Free Market on Friday and Saturday at Strathcona Community League.
The club’s secretary Deborah Harrop said the event was started by university students in response to the “conspicuous consumerism” of Black Friday.
“People bring things they don’t want anymore and then take away anything they can use. No money exchanges hands,” Harrop said.
Attendees are likely to find tables worth of books, CDs, DVDs, small kitchen appliances, clothing, children’s toys and small electronics, and whatever doesn’t get picked up will go to Goodwill or Value Village.
Harrop said customers often include university students, as well as newcomers to Canada who need kitchen supplies and warm clothes for their kids.
Some who drop off items are in the process of de-cluttering or downsizing their homes.
“It’s just a matter of filling a need, we think, for folks who don’t necessarily have the money or would rather recycle,” Harrop said.
“I think it reflects the current population’s desire to recycle things – not just use them and toss them.”