Buying Stuff Isn’t Saving Money


Ah, well. I knew it was too good to last. A couple of months ago, I wrote a piece about how Fidelity’s latest ad campaign about managing your personal economy impressed me with its common sense message. Well, here we are three months later and their newest ad campaign has gone in the opposite direction. Instead of preaching common sense, they’re now preaching one of the top ways consumers get themselves in trouble. I’m adding them to my wall of shame.

The ad is for the Fidelity American Express Rewards credit cards. These cards place two percent of your spending into an eligible Fidelity savings account. While this isn’t a bad idea for the disciplined credit card u


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4 Responses to Buying Stuff Isn’t Saving Money

  1. Samantha says:

    Your math is wrong. Published interest rates are an annual rate. To get the monthly amount, you must divide the published rate by 12.

    Principal * (1 + (Interest rate/12)) = New balance at the end of the month.

    (And if there’s other math people reading this, yes, I know this is the simplistic formula, and not the correct “Pert” formula, I’m trying not to overly lose people with exponents and e.)

    So 6 * (1 + (.005/12)) = 6.0025, which will round down to an even $6.

    For the new balance to work out to $6.03, the interest rate would need to be 6%.

    Your logic is still sound. I’d rather have $6 left at the end of the month than 12 cents.

    And even at 1/2% interest, if you do it every month for a year you will have (assuming your bank rounds .5 cents up, and not just rounds all fractional cents down to zero) $72.21, as opposed to $1.44 in “savings.”

  2. getforfree says:

    How about buying things on sale with coupons and stock up. I bought some toilet paper very cheap about 2 years ago and didn’t have to buy ever since.

    I usually buy things when I find a good deal instead of when I run out of something and have to buy it at a regular price. Of course you should only buy as much as you can use before it spoils otherwise it will be a waste of money, not savings.

  3. Jo says:

    Jennifer, all you needed to say to describe “spaving” is, “Penny wise; Pound foolish.” Cliche, I know, but it still sends a message. 😉

  4. jay says:

    Works if, as you say, (1) will use before expiration, and as implied in this article, (2) you pay for it in full -not carrying over a balance, as well as (3) you readily have the storage space, i.e., not paying extra for it.

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