First, you need to make sure you aren't making a bigger commitment than you're ready for. For instance, the Target REDcard credit and debit cards are a much bigger commitment than MyLowe's “points” cards. “And it's usually a bad idea to open a new line of credit just to get early access to a Black Friday deal,” says Somogyi.Second, you need to figure out if the loyalty program is beneficial for you. Maybe you rarely shop at that store and you know you'll never redeem your rewards. Maybe you have credit card debt and know that opening a store card would tempt you to overspend. There are a lot of reasons why a loyalty program might not be right for you. That's why it's important to carefully read the fine print.
If you're thinking about signing up for a store loyalty program to get the jump on Black Friday deals, here's what to consider.
- Is the offer only for a sneak peek? If so, “see if the ad has been leaked online,” says Somogyi. The Sears ad, for example, was already leaked on the web. “Most of the ads have been leaked by now,” he says.
- If the offer is for early or exclusive access to purchase items, is there anything you actually want? Again, look to Google. “Get as much information as you can about their Black Friday deals first,” says Somogyi. “Then, see if there's anything you even want to buy before entangling yourself in a loyalty program.”
- Are you already a longtime, loyal customer? “Signing up for a loyalty card as a knee-jerk reaction is not the best idea,” says Somogyi. But he says if you're already a longtime customer, it might be worth considering: “If you're loyal to a store, it might be a good idea to sign up and get rewards.”
- Can you handle the terms? Cards that just track purchases or offer points don't put you on the hook for anything too serious. But if the loyalty program is a credit card, you need to be honest with yourself about your financial habits. “If you already shop at Target a lot, and you know you can handle a REDcard, it might not be a bad idea,” says Somogyi. If you have a history of missing payments or carrying a balance, however, pass on the offer. After all, the REDcard credit card might offer 5 percent off purchases, but it also charges a whopping 22.9 percent APR.