Amazon vs Macmillan. The world’s largest online retailer, which accounts for 15-20% of books sold in this country, pitted against one of the sixth largest book publishers. A match between titans.

Up until its fight with Macmillan, Amazon charged $9.99 for an ebook. But instead of pricing all ebooks the same, Macmillan wanted Amazon to charge between $12.99 to $14.99 for ebooks it published, which is called the “agency model.” The price of a Macmillan book would decrease over time as the book lost its status as a new release. The deal was similar to the one Macmillan (and four of the other “Big Six” publishers) had just signed with Apple for use with its iPad.

In response, Amazon removed all of Macmillan’s titles from its web site.

In the end, though, Amazon — in its words — “capitulated” because Macmillan held a “monopoly” on its books:

Dear Customers:

Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling e-book. We don’t believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!

Thank you for being a customer.

In its announcement, Amazon doesn’t wrap itself up in the American flag, but it does wrap itself up in the “consumer protection” flag. Amazon claims that it wants to sell “consumers” ebooks at reasonable prices — $9.99 instead of $14.99. But Macmillian won’t let Amazon do that because Macmillan has a “monopoly” over its books and apparently wants to gouge the customer by charging much more than the book is worth.

Amazon’s Deceptive Argument

Amazon’s argument is deceptive, for several reasons.

Companies That Make Products Have Monopolies over Those Products

Macmillan publishes books, which gives it control over the books that it publishes. And if book publishing is a monopoly, as Amazon claims, so is about every other business that produces products. Colt firearms has a monopoly over Colt firearms. Firestone tires has a monpoly over Firestone tires, Hallmark Greeting Cards has a monopoly over Hallmark Greeting cards. And so on ad nauseam.

By saying that Macmillan has a monopoly over its books, Amazon is setting up a straw horse — all the better to make itself seem like a White Knight for the “consumer” — in this case, readers.

$9.99 Is Not Necessarily a Reasonable Price for an Ebook

Amazon is a book wholesaler, not a book publisher. That is, Amazon — like any other bookseller — buys books from publishers such as Macmillan at wholesale prices, increases the price, and then resells the books to the public. Because of its size (the country’s 19th largest retailer) and buying power ($19 billion in sales), Amazon gets around a 50% discount on books it buys from publishers. (By contrast, chain stores get around a 40% discount and independent book  stores  get around a 20% discount. No wonder Amazon can sell books at such low prices — because it buys them low, which is an advantage other booksellers, especially independents, don’t have.)

So Amazon actually pays $15 for, say, a $30 book, but sells it at $9.99. That’s a called loss leader. Amazon sells the ebook at below cost in order to gain market share — and put other booksellers out of business.

The book Amazon wants to sell at below cost might be an ebook, but considerable time and expense went into producing that book:

• The writer spent time researching and writing the book.
• The writer’s agent spent time getting the book ready to sell to the publisher and also did all the work of finding a publisher that would buy it. The agent also went to considerable effort to look out for the writer’s interests.
• The editor spent time reading and editing the book.
• The graphic designers spent time designing the book cover and book layout.
• The marketing people spent time devising a marketing campaign
• The publisher spent money marketing the book

Some people might say that an ebook  shouldn’t cost much because the work of creating it has already been done. But that’s not true. According to Erick Sherman:

the electronic versions [of hardcopy books] only save a little money per copy in printing and inventory costs. The vast bulk of the expenses in writing, editing, production, and marketing remain.

Amazon Uses Cheap Ebooks to Sell Kindles

Amazon loses money on its $9.99 ebooks. So how does Amazon make up for its lost revenue? By selling Kindles at between $260-$490 each. That’s right. The Kindles have a high profit margin. And once a reader buys a Kindle and begins reading ebooks on it, he or she is glued to the Kindle.

And that’s just what Amazon wants.

Amazon’s Great Deception

Amazon’s Great Deception is that, like WalMart, it wants to get a strangle hold over what products — in this case, books — are sold to everyday citizens like you and me. And Amazon’s talk about “monopolies” and “reasonable” prices is just a smoke screen to hide its real agenda.

Amazon actually wants to reduce choice and put independent book  stores, as well as chain book stores, out of business.

How is Amazon trying to do that? By:

• Emphasizing the “consumer’s” right to a low, low price
• Controlling readers’ access to ebooks
• Controlling rights to a writer’s ebooks

Emphazing the “Consumer’s” Right to a Low, Low Price

I mentioned in my post about how chain stores turned us into consumers that we went from being a nation citizens who shopped to being a nation of “consumers” whose role it is to expect low prices. The notion of low prices is key to Amazon’s business model. And it’s central to how Amazon markets the Kindle: Amazon customers should expect to buy ebooks at below cost — regardless of how the below-cost pricing affects publishers and writers.

Amazon’s market clout, which lets it buy books from publishers at wholesale prices independent book stores and chain books stores can’t meet, lets it charge lower prices than its competitors. That’s hardly an even playing field. Amazon’s size also lets it sell ebooks at below cost — something that independent book stores can’t do, unless they have a death wish to go bankrupt.

Like WalMart, Amazon’s charade as a champion of low-cost products comes at a high cost to “consumers” by limiting what they can read, and by driving independent book  stores out of business, and by siphoning money from towns and cities to Amazon’s corporate coffers.

(If you go on the Amazon Forum, you’ll see a lot of people denegrading Macmillian and praising Amazon for its “pro-consumer pro-book” stance.)

Controlling Readers’ Access to Ebooks

Through its claims to digital rights management (DMR), amazon controls readers access to the ebooks its sells. To put it simply, Amazon — not you — owns the ebooks you “buy” from the Kindle store. The DMR contract that you agree to when you download the ebook prohibits you from sharing the ebook with someone else, reselling the ebook, or moving the ebook to another brand of ebook reader to read. (Of course, right now even if you move the ebook to another brand reader that reader can’t read the format of the Amazon ebook.)

I believe that some ebook readers are incompatable with the Kindle as well — and also with one another. However, Amazon is the Big Enchilada that’s trying to take market share from everyone else.

The situation is fraught with peril for anyone who likes to read, for anyone who wants to write and be published, for publishing companies, and for both independent book  stores and chain book stores. Blogger Farhad Manjoo fears for the future of the publishing industry and wonders “what will happen when it [Amazon] has no rivals.

Controlling Rights to a Writer’s Books

Amazon controls the rights to a writer’s books that it sells electronically — even if you, the writer, own the copyrights to your books. To have Amazon publish your book, you have to agree not to allow readers to read your digitized book on any other book reader except the Kindle. If you won’t agree, then Amazon won’t sell your book as an ebook.

But Amazon wants to be more than a book seller. It wants to be a publisher, too, by encouraging writers to self-publish their books as ebooks and sell them on Amazon. Is publishing on Amazon a good thing for writers?

Not according to Damon Brown, who says that authors who self-publish ebooks on Amazon put themselves in a particularly bad situation and also put themselves at Amazon’s mercy. First, by allowing the writers to self-publish, Amazon eliminated the literary agent, who typically deals with the publisher and looks out for the writer’s welfare. So the writers are left on their own, with no one to represent them.

Second, in its contract with those self-published writers, Amazon gains total control of their books without providing the benefits a traditional publisher gives them:

The new Kindle deal gives Amazon as much power as a traditional book publisher over an author’s work, but it lets Amazon own the rights without the promise of promotion, negotiation or other traditional publishing options. There is no marketing budget. There is no return of rights after the book goes out of print – - because, well, it will never go out of print. There is no renegotiation if the Amazon decided to use the book someway with its Kindle apps – - and no guarantee the author would be paid additionally for it since it isn’t technically a “book”.

If you own an independent book shop or like to buy online from independent book stores, you won’t be able to find the digitized versions of books that Amazon sells. You’ll only be able to find — and buy — them at Amazon.

The fact that Amazon “capitulated” to Macmillan is good for readers like you and me and, hopefully, for independent book  stores. Why? Because Amazon — not Macmillan or any other book publisher — wants to develop a monopoly over the books you and I read. And Amazon’s “capitulation” put a wrench in its gears, slowing it down but not stopping it.

A Better Alternative

We’ve been through this problem many times before — from proprietary computer software to VHS to DVDs. The readers who are being preyed on by Amazon — people like you and me — should demand a single format for ebook readers.

If Amazon wants to become a publisher of ebooks, then it should act like a publisher. It should make its ebooks available to other stores and web sites that sell ebooks — just like every other publisher does.

Amazon criticized Macmillan because it wanted to use Apple’s “agency model” of pricing. In this model, Apple acts as the distributer of the ebooks, not the wholesaler, and lets the publisher set the price up to a $14.99 ceiling. As time goes by, the price falls just as happens with hardcopies. Perhaps the “agency model” isn’t the best model, but it’s a lot better than Amazon’s.

And Amazon should collect sales tax on the books it sells. But that’s another story.

In the first part of this series on store credit cards, we saw why chain executives want you to apply for them. By having a store credit card, you develop loyalty to the chain. You’ll also buy more “stuff” from the chain’s stores because you’ll pay for the merchandise with credit instead of cash.

In the second part, we saw that applying for and using a store credit card — or any other kind of credit card — can lower your credit score. The high interest rates on store credit cards also can drain you financially.

In this post, I’m going to talk about what I personally think is the best kind of credit card to have: a credit union credit card. I’ve had one for over thirty years, and it’s the only one I have. A report on the best and worst credit cards in a 2007 issue of Consumer Reports shows why. The article says that APRs for credit union credit cards were lower than APRs for bank-issued credit cards (9-11% vs. 17%). The article also quotes George Overstreet, who teaches finance at the University of Virginia, as saying why credit unions offer better deals on credit cards than bank credit cards (or store credit cards):

Credit unions are run by members, so they have a vested interest in providing credit at very low rates. And they are more focused on keeping their members happy, while banks have to worry more about keeping their investors happy.

Currently, the APR on my card is 10.90% (although I always pay the full balance at the end of the month).

Credit Unions also give loans with lower interest rates than banks. I remember in the 1990s, when I was buying a new Honda, the salesman tried to get me to finance the loan through him. He thought Honda financing had low interest rates. So he asked me how much interest I’d be paying for my loan through my credit union. When I told him, he said in surprise, “I can’t touch that!”

Many credit union credit cards also are competitive in offering rewards, just like bank cards and store cards. My own card pays me a percentage of what I spend on it annually. This perk doesn’t change my spending patterns, but I do like to see the money suddenly show up in my credit union savings account at the end of each year.

Another nice thing about credit union credit cards — and loans you get through the credit union — is what happens when you get hit by tough times. Unlike banks or loan companies, the staff at your credit union will work with you develop a plan to pay off the debt. After all, you’re not just a customer, but a member as well.

One final note: Congress has passed legislation that will change some of the practices of credit card companies. Already some companies have raised the interest rates on their cards, and doing other things, to head off the legislation. But the credit unions aren’t. The new policies that are being forced on the for-profit banks and credit card companies are policies that credit unions have been following for years.

Do any of you have credit union credit cards? If so, what do you think about them?

See also:

• Why Chains Want You to Get a Store Credit Card
• How a Store Credit Card Can Hurt You

In the first part of this series on store credit cards, we saw why chain executives want you to apply for them. By having a store credit card, you develop loyalty to the chain. You’ll also buy more “stuff” from the chain’s stores because you’ll pay for the merchandise with credit instead of cash.

All this is great for the chain, but not for you. Why? Because applying for — and having — a store credit card can hurt you by lowering your credit score and draining you financially.

Hurting Your Credit Score

Store Credit Card Trap

Fair Isaac Corporation (recently renamed FICO™) creates credit scores, called an FICO™ score. Most lenders use your FICO score in deteremining how risky it is to give you a loan. FICO scores range from 300 to 850:

• 700-850 — very good to excellent
• 680-699 — good
• 620-279 — OK
• 581-619 — bad
• 500-580 — worse
• 300-499 — worst

If you have a bad credit history, and you’ll have trouble getting a loan. And if you do manage to get a loan, you’ll probably pay high interest on it.

What’s your FICO score got to do with store credit cards? Several things.

Applying for a Store Credit Card Can Lower Your FICO Score

Each time you apply for a store credit card, the cashier runs a credit check on you. And each credit check lowers your FICO score a few points. So the more store credit cards you apply for, the more points you lose on your credit score. Having too many outstanding balances on multiple store credit cards raises red flags to lenders. Also applying for too many rewards cards within a short period of time — such as Christmas season — raises red flags. Those red flags make you appear as a poor credit risk.

It’s especially important not to apply for a store credit card — or any other kind of credit card — within a year before you apply for a house loan or other major type of loan. Applying for the card could jeoardize getting your loan. Sales associate doesn’t tell you that when they ask you if you want to sign up for a rewards card. In fact, they probably haven’t a clue that might happen.

Getting Declined for a Store Credit Card Lowers Your Credit Score

Getting Rejected Can Hurt Your Credit Score

Sometimes a sales associate will entice you to apply for the store credit card by saying that even if you get declined you’ll still get the discount. Some people know they’ll be declined, but apply anyway just to save the 10% discount on the transaction. Big mistake! Getting declined for a charge card lowers your FICO score even more than applying for a card.

Closing a Store Credit Card Can Lower Your FICO Score

Sometimes a sales associat might tempt you into applying for a store credit card by suggesting you pay off the bill and then cancel the card. That way, you can still buy the item and get your 10% discount.

Doing that is a big mistake.

Part of your credit score is determined by the total amount of credit available to you. By getting approved for the store credit card, you just increased your total credit limit. But if you cancel the card, you’ll decrease your credit limit, which will lower your credit score. And canceling more than one recently approved rewards card or other kind of credit card will decrease your score even more.

Canceling a store credit card doesn’t wipe that charge account off your credit records. Instead, the charge account remains part of your credit history for seven years.

Getting a New Store Credit Card Decreases the Average Age of Your Credit History

Part of your credit score is based on the average length of your credit history. If you’ve had a credit card for ten years, you have a long credit history. But getting a new credit card shortens the average length of your credit history, which also lowers your FICO score. And the more credit cards you get, the shorter your credit history becomes, and the lower your credit score drops.

Store Credit Cards Have Low Credit Limits

Most store credit cards have low credit limits — say, $500 or $1000. Unlike traditional credit cards, which usually have much higher limits, it’s easy for you to approach the limit on a store credit card. But when you approach your credit limit, you can lower your credit rating. If you approach your credit limit on several credit cards, your credit rating will drop even more.

Paying High Interest Rates

Many store credit cards charge higher APRs — Annual Percentage Rates, or interest rates — than traditional credit cards such as Visa, MasterCard, or Discover. According to The Simple Dollar, many store credit cards have a high APR of 22.99%. Some rewards cards go even higher.

High Interest Rates = Financial Problems

One reason corporate executives push their store credit cards is because many card holders don’t pay off their rewards cards every month and have to pay interest on the balance left on their cards. True, the recession has motivated many of people to pay off their balances and others to simply stop paying. But many of people are still carrying over balances and paying the interest on those balances. And many people are still applying for — and receiving — a store credit card.

Many people apply for a store credit card just to get the 10% discount. Then, instead of paying off the bill when it comes due, they carry the balance over to the next month. By carring over the balance, though, they allow the high interest rate to eat up the 10% they saved. The only way to keep the savings is to pay the balance when it comes due.

Store credit cards also tend to have very low minimum payments. So if you pay the minimum rate, it could take decades for you to to pay off the credit card balance.

Let’s take a look at some store credit cards and how they can hurt you.

Home Depot

Home Depot offers a store card with no annual fee and an APR between 17.99% and 26.99%. The APR you get is based on your credit worthiness. In the fine print, though, Home Depot says that less than 50% of the people who apply for their store credit card will get an APR of 25.99% or higher. So over half the people who qualify for their card will pay an annual interest of 25.99% or more. That’s quite a high rate! And even Home Depot’s lowest rate of 17.99% is pretty high.

Home Depot doesn’t say anything about minimum monthly payments, except that they are “low.”

As an enticement to spend at Home Depot, the chain offers a special promotion: a six-month grace period of no payment, no interest. But only if you charge $299 or more on your card in a single transaction. Home Depot places no limit on the number of $299 transactions. But in the fine print Home Depot says that if the you don’t pay off the $299 by the end of the promotion, you’ll be penalized. The same holds true if you miss a payment.

Spending $200 to save around $40 doesn’t sound like a good idea to me. It is a good idea, though, to the executives who run the company.

WalMart

WalMart offers a store credit card with no annual fee and a flat APR of 22.90%. You also can save 3¢ off the “regular street price” of gas if you fill your car up at one of WalMart’s participating filling stations. I couldn’t find any specific information about minimum monthly payments.

WalMart also has a promotional offer of no payment and no interest for six months on an initial purchase of $299.

Kohl’s

Kohl’s offers a store credit card with no annual fee and a variable APR — currently 21.9% — which the company determines quarterly. Kohl’s also offers 10% off your first day’s purchases. I couldn’t find any specific information about monthly payments.

As an extra enticement, Kohl’s offers you “extra discounts on everything 12 times a year,” which lets you “[s]ave as much as $120 annually.” But in the fine print they add that the $120 figure is “[b]ased on shopping all events with average purchases of $100 each and average additional savings of 10%.” So to save $10 a month, you have to spend $100 a month. Some deal!

TJX

TJX offers as store credit card, called a TJX Rewards™ Card, with no annual fee and a variable APR, which currently is 21.99%. You get 10% off your initial purchase. For Every $200 you spend at Marshalls, TJMaxx, HomeGoods, and A.J. Wright, you get a gift certificate for $10. I couldn’t find any specific information about monthly payments.

Is there a better alternative to store credit cards and bank credit cards, all of which have high interest rates? You bet there is. And I’ll talk about it in my final post in this series.

See also:

• Why Chains Want You to Get a Store Credit Card
• The Credit Union Credit Card — a Better Alternative

“Would you like to save ten percent today?”

Plastic Money -- Chains Want You to Use It Instead of Cash

You’ve probably been asked that question countless times while you were checking out at a chain store or big box store. If you follow the company’s script, you ask, “How?” Then the sales associate explains that by applying for a store credit card — oftentimes called a rewards card — you’ll save ten or twenty percent on your initial purchase. Then, each time you spend a certain amount of money at any of the chain’s stores — say, $200 — you’ll receive gift certificate for $10.00 or some other amount. You’ll also receive information about special offers and sales for card holders.

The sales associate will go on to say that by filling out a form, you can get instant approval. Then you’ll get the initial discount if you put your transaction on your new store credit card. If you don’t get approved on the spot, usually you’ll still get your discount.

Pressure on Sales Associates to Get Store Credit Cards

Chains Pressure Sales Associates to Ask for Store Credit Cards

Like some of us, you’ve probably been asked the question so often that you want to snap back at the sales associate. But don’t be too hard on him or her. Every month, the executives at corporate headquarters put pressure on store managers by setting quotas for the number of credit cards each store must get that month. The store managers, in turn, put pressure on their sales associates to get at least that number rewards cards.

Oftentimes, sales associates are given individual quotas to meet. The quota depends on how many hours the associate spends working the cash register each week. Many times the sales associates don’t even know what their monthy quotas are.

Both corporate executives and local managers use a carrot-and-stick approach to motivate sales associates to meet their quotas. Motivational techniques might include:

• Giving rewards to stores that meet or exceed their monthly quotas for credit cards.
• Requiring the store manager to phone the district manager to inform him or her that the store didn’t meet its quota for rewards cards. (Some chains even have daily or weekly quotas for their stores. The managers of those stores have to phone their district managers at the end of every day or week — after the stores close in the evening — to inform them of their failure to meet the quotas.)
• Giving rewards to sales associates who meet or exceed their monthly quotas.
• Putting up a list in public view in the break room that names each sales associate, his or her quota for the previous month, and the number of rewards cards each associate actually got. A personal note at the bottom of the list might congratulate the associates who met or exceeded their quotas and tell the ones who didn’t to “get with the program.”
• A manager’s reminding an associate to ask for store credit cards at the start of the associate’s shift.
• A manager’s asking a sales associate at the end of the shift how many rewards cards he or she got.
• An “under performing” associate being called into the manager’s office to discuss why he or she isn’t getting enough store credit cards.
• A manager’s threatening to “write up” the head cashier if she didn’t get at least one rewards card a day.

Why all the pressure by corporate executives to get store credit cards? Because those credit cards bring in big money for the chain.

Overspending with Credit Cards

A Happy Shopper Who Overspent

Studies have shown that you spend more money when you pay for something with a store credit card (or any othe kind of credit card) than if you pay for it with cash — 12-18% more money. And the corporate executives want you to overspend at their chain stores.

How do you overspend by using a store credit card? The answer is simple, but not necessarily obvioius. If you pay for something with cash, you get to weigh the relative merits of the item vs. the price — that is, you can compare the pleasure of getting the item vs. the pain of paying for it. But if you pay for the item with a credit card, you get immediate pleasure — and put off the pain until later.

In an article in Psychology Today, author Michael Kaplan calls putting off the pain till later “hyperbolic discounting.”

[t]he brain decides whether a price is fair by balancing the anticipated pleasure against the pain of financial loss; both of these are emotions of the moment. But if the pleasure is immediate and the pain is in the future, how can we compare them? This is the secret horror of credit: by punting payment off into the middle distance, it brings hyperbolic discounting into play whenever we feel the urge to acquire.

Psychologists have conducted studies in hyperbolic discounting. Medical News Today talks about several studies by Dr. Priya Raghubir and Dr. Joydeep Srivastava. In one study, participants were more willing to pay more for a meal with a credit card than with cash. In another study, participants were more careful with their expenses when they had to create an item-by-item budget for a Thanksgiving dinner. By creating the detailed budget, they could visualize the pain of the dinner’s cost.

I also remember reading about a study a couple of years ago reported in The Boston Globe. In this study, two groups of people were sent to a restaurant with a budget of how much they could spend on their meals. The group paying with a credit card went over their budget. The group paying with cash kept to their budget. (Unfortunately, I can’t find a reference to the study.)

What all these studies and scientific lingo boil down to is that how you pay for something determines how much you’re willing to spend for the item or service. You can pay in one of three ways — cash, debit card or check, or charge card. And each way of paying has its own level of pain:

1. When you pay for something with cash, you feel intsense pain because you can actually see the dollars and coins leave your wallet, purse, or budget envelopes. If you have to take extra money from the ATM, you have the money in hand and know you just depleted your checking account by a certain amount. In short, by paying with cash, you can budget your money and keep track of your spending.
2. When you pay for something with a debit card or check, you feel moderate pain, which isn’t as intense as when you pay with cash. You can jot down the expense in your check book or keep track of it in Quicken, but you don’t actually see the bills and coins leave your wallet or purse.
3. When you pay for something using a credit card, you feel no pain at all because nothing leaves your wallet, purse, budget envelopes, or bank account. Many people don’t even keep track of their charge expenses — and get a horrid jolt each month when they receive their charge bill.

How a Store Credit Card “Chains” You to the Store

An enticement -- Some People Sell Themselves Short!

The whole point of persuading you to get a store credit card is to make you loyal to that chain’s stores. First, you’re enticed with an initial 10% discount from your initial purchase. Personally, I don’t think 10% is a lot of money. But I’ve seen people sign up for a store credit card just to save 10% on a purchase of under $8.00. Eighty cents (80¢) is a high price to pay for potential credit problems down the line, which I’ll discuss later.

Second, by offering you a deal such as a $10 coupon for every $200 you spend, the’ll keep you coming back to the store to buy stuff so you can get another $10 coupon. That’s fine if you normally buy things at the store anyway, and only buy things that you need. But many people don’t spend that wisely — not even during this recession. So many people end up spending $200 to get back a measley $10. That’s just 5% of what you spent out — not even the amount of the sales tax in some states. Spending $200 to save $10 isn’t much of a bargain.

Third, by alerting you to offers and special sales, they’ll keep you coming back to the store to buy more stuff and pay for it with your rewards card. Again, if you buy something you actually need, that’s fine. But many people don’t make buying decisions that way.

Fourth, store charge cards — and all charge cards — encourage impulsive buying because you don’t feel the pain of the price. That’s why you’ll find candy and other “impulse” items at the checkout line. I even know of a store that put a cooler at their checkout line to entice customers to buy water and soda while waiting for a cashier.

In my next post in this series, I’ll talk about how applying for — and using — a store credit card can hurt your credit score and also create financial problems for you.

See also:

• How a Store Credit Card Can Hurt You
• The Credit Union Credit Card — a Better Alternative