Quiz | August 2012

Bargain or Trap?

istockphoto

By Erin Burt, Contributing Editor

June 2012

What seems like a bargain may really be a bad deal in disguise. If you've ever shelled out money for something you didn't need, bought shoddy merchandise because it cost less, or overspent on something you could have gotten cheaper elsewhere, you've been lured into wasting your money.

Don't take the bait. Try our quiz to see if you can tiptoe around the traps and sniff out the true bargains:

Quiz

Bargain or Trap?

Thinkstock

Question 1 of 10

Applying for a store credit card to save 10% on today's purchase.

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 1 of 10

Applying for a store credit card to save 10% on today's purchase.

You're right! B. Trap is correct.

Sorry, wrong! is incorrect.

The right answer is B. Trap.

On the surface, it sounds like a great deal -- immediate savings! But getting a retail credit card on a whim may lower your credit score. Applying for new credit dings your score, plus store cards have low credit limits, which make it easier for you to run up a higher credit-utilization ratio. That's the amount of debt you have relative to your credit limits, and it too affects your score. The lower the ratio, the better. Retail credit cards also tend to carry very high interest rates -- often in the 20% range.

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 2 of 10

Joining an auto club, such as AAA.

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 2 of 10

Joining an auto club, such as AAA.

You're right! A. Bargain is correct.

Sorry, wrong! is incorrect.

The right answer is A. Bargain.

Depending on your location, a new basic AAA membership can cost between $57 and $67. You can earn back your money if you utilize its roadside assistance just once a year -- it provides lock-out services, towing, tire changes, out-of-fuel refills and more. But even if you're lucky enough not to need AAA, you can recoup your cost through membership discounts at hotels, movie theaters, amusement parks and more. Plus, you get discounts at online retailers, including Target.com, Gap.com and Dell.com.

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 3 of 10

Using tax software to prepare a tax return yourself.

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 3 of 10

Using tax software to prepare a tax return yourself.

You're right! A. Bargain is correct.

Sorry, wrong! is incorrect.

The right answer is A. Bargain.

You'll usually pay $400 to $500 for a certified public accountant or enrolled agent to prepare your tax return. But if your financial situation is fairly straightforward, you can save big bucks with tax-prep software, such as TurboTax, TaxAct or H&R Block At Home. Prices range from free to $50 for the most popular tax programs. You simply answer interview-style questions, and the software automatically fills in your tax forms. (For complex matters, such as real estate investments or stock options, it's best to stick with a pro.)

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 4 of 10

Paying less than $10 for a copy of your credit report.

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 4 of 10

Paying less than $10 for a copy of your credit report.

You're right! B. Trap is correct.

Sorry, wrong! is incorrect.

The right answer is B. Trap.

Even $1 is too much. By law, you are entitled to a free credit report every year from each of the three main credit bureaus: Equifax, Experian and TransUnion. Go to annualcreditreport.com. You can pull all three at once, but if you spread them out evenly over the year, you can keep closer tabs on your credit history.

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 5 of 10

Using a no-contract cell phone service

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 5 of 10

Using a no-contract cell phone service

You're right! A. Bargain is correct.

Sorry, wrong! is incorrect.

The right answer is A. Bargain.

Pay-as-you-go and flat-rate, no-contract plans are growing in popularity, and for good reason. Many cell phone customers pay for minutes they don't use, and they're locked into contracts they'd have to pay steep fees to get out of. With no-contract plans, you can pick your voice/text/data plan based on what you need. And if you change your mind, no problem! Simply switch plans penalty-free. Here are five plans worth a look.

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 6 of 10

Getting vitamins or medications at the dollar store.

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 6 of 10

Getting vitamins or medications at the dollar store.

You're right! B. Trap is correct.

Sorry, wrong! is incorrect.

The right answer is B. Trap.

Consumer Reports found that dollar-store multivitamins didn't always have the amount of nutrients claimed on the label. And some didn't dissolve fast enough to be absorbed by the body. CR also warns that aspirin and other medications may be left on the shelf past their expiration dates, and labels may not say where the medicine was manufactured. Generic vitamins and pills from your local pharmacy or supermarket are a better bet, and they may not cost much more. (Take our Dollar Store: Deal or No Deal quiz.)

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 7 of 10

Going shopping at outlet stores for your favorite brand names.

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 7 of 10

Going shopping at outlet stores for your favorite brand names.

You're right! A. Bargain is correct.

Sorry, wrong! is incorrect.

The right answer is A. Bargain.

Brand-name merchandise won't be dirt-cheap at the outlets because it's expensive to begin with. Still, if you have your heart set on a brand name, you can save close to 30% off regular mall prices, on average. It pays to be familiar with the prices of items you want to buy, so you'll know whether you're truly getting a bargain. See What to Know About Outlet Store Shopping to learn more.

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 8 of 10

Paying for private mortgage insurance rather than dropping a huge down payment on a house.

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 8 of 10

Paying for private mortgage insurance rather than dropping a huge down payment on a house.

You're right! B. Trap is correct.

Sorry, wrong! is incorrect.

The right answer is B. Trap.

Private mortgage insurance, or PMI, is typically added to your monthly mortgage payments when you put less than 20% down on your home purchase. And it is of zero benefit to you. Rather, it protects the bank if you default on your loan. Each year, you'll pay between 0.5% and 1.5% of your loan amount for PMI. On a $250,000 loan, that adds up to $312 extra per month! Saving up for a larger down payment before buying a home is the smarter financial move.

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 9 of 10

Buying long-term-care insurance.

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 9 of 10

Buying long-term-care insurance.

You're right! A. Bargain is correct.

Sorry, wrong! is incorrect.

The right answer is A. Bargain.

The potential costs of long-term care are just too large for most people to ignore. In 2011, nursing-home care topped more than $87,000 a year. And home care can cost even more. Without long-term-care insurance, you (or your family) have to foot the bill. "Your financial plan is not complete unless you have some kind of protection for long-term care built into it," says Peter D'Arruda, an investment adviser and president of Capital Financial Advisory Group, in Cary, N.C. See our special report on long-term care to learn more.

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 10 of 10

Buying a used car seat for your child.

A. Bargain
B. Trap

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Thinkstock

Question 10 of 10

Buying a used car seat for your child.

You're right! B. Trap is correct.

Sorry, wrong! is incorrect.

The right answer is B. Trap.

Buying used baby gear, toys and clothes can be a great way for new parents to save money. But for safety reasons, a used car seat is the exception. There's no way to verify how old it is or if it has been in an accident. Car seats have an expiration date: six years. After that, the manufacturers say that the plastic can weaken from years of extreme hot and cold temperatures inside the car. Plus, government safety standards change over time. Never cut corners when it comes to your child's security.

SCORE: 0 out of 10 correct
1
2
3
4
5
6
7
8
9
10

Quiz

Bargain or Trap?

Results: 0 out of 10 Right

Quiz | August 2012

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

Quiz

Bargain or Trap?

See Also

Popular Quizzes

Advertisement

Advertisement

Featured Videos From Kiplinger