My day at Bath and Body Work

Bath and Body works 128 126

Share my date, July 3, 2014,  @Bath and Body Works

I was standing in line at Bath and Body Works for 20 minutes.  There were 6 people in front of me.  Usually I won’t have that kind of patient to wait in line but that day I had an appointment and I were way early than my schedule so I need to kill some time.

Anyway, I was in line and these were my 2 observations:

  1. There was 3 out of 6 people paying in cash.
  2. There was 4 out of 6 people did not use coupon and their transactions amount were average $45.

These were the questions that spinning in my head:

  1. Why do not they use credit card?
  2. Is it because they have bad credit and won’t quality for credit card?
  3. Is it because they do not want to over spend?
  4. Do they know they can save at least 30-40% if they utilize the coupon?
  5. Do they aware they could earn a lot of points/miles/cash back on their daily life spending?

Please keep reading. Below are the answers to the questions that spinning in my head that I would like to share.

Benefits of using credit card:

  • Free money to use from the bank.
  • Develop a consistent payment routine and establish your credit for future purchase, like a home.
  • Earn points/miles/cash back to enhance your purchasing power of your spending.

I do not encourage carry a balance on credit card because once it builds up, it could be a financial disaster, so the key is to use your credit responsibly.

If you current do not have a good credit, these are some repair strategies that could improve your credit score:

  1. Never late on any payment – change all your payment due date to the same date, recommend 16th of each month, the day after your payday
  2. Develop a consistent payment routine – setup auto-pay or online recurring payment, at least 20% higher than your minimum payment
  3. Do not max out your credit limit – keep the utilization below 70% of your credit line
  4. Try not have too many credit inquiries – limit to 4 times per year, and avoid any inquiries within 6 months when you apply for a mortgage or refinance.

If you do not want to over spend, I do have a suggestion for you.  You do not need to keep the approved credit line and you can request the bank to lower your credit line.

For example, if my monthly expenses are approx. $1500, I would get a line of $2000.  Give yourself some buffer for emergency.  This could be done easy by calling your bank and tell them this is the credit line that you wish.

In this case, Bath and Body Works has a $20 off when you purchase $50.  As I mentioned, there were 4 out of 6 people purchased average $45.  Most of the items were $3 each.  If they purchased 2 more $3 items, their purchase will be $51.  With $20 off, they only pay $31.

$31 vs $45, save 31% + 2 more items

 

* Message from @kingofCrazyForMiles, Andy Lam

 

 

 

 

 

 

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