The ‘feel good’ psychology of buying is linked to the release of dopamine in the human body. Sales with the retail space specifically target these feelings, wanting us to feel satisfied and fulfilled by buying things we might not necessarily need at all! In fact, research conducted by Claremont Graduate University in 2010 suggested that advertisers use images that cause our brains to release “happy hormones” to build trust in a product or brand, and thereby increase sales.
The Credit Ombud asks that consumers be alert to sale excitement and to remain financially savvy by considering the following key tips.
- Plan and budget for the items you wish to purchase. We suggest that you compile a list of your monthly income and expenses and subtract your expenses (including debt obligations) from your income. Use that as an indicator to budget for any purchases you make.
- Be vigilant when making purchases online. With the enhanced ease to shop online, there comes a corresponding risk relating to fraudulent activity. Protect yourself from buying from unknown sources and ensure that a secure payment method is used.
- Check your bank statements for any unusual debits.
- Avoid purchasing on credit and if you must, then ensure that you understand the total cost of credit. Always enter into credit agreements with registered credit providers.
- Shop around for the item you wish to purchase by comparing prices.
- Your credit score is your credit reputation. It is a score credit providers use, among other affordability criteria, to decide if they want to extend credit to you now or in future. One of the important factors when calculating a credit score is your monthly payment behaviour. Past credit behaviour is an indicator of future payment behaviour. Your credit score offers some telling insights into the state of your finances. Keep your credit profile up to date at all times and watch out for any warning signals that might impact on your positive credit score.
Consumers can contact the office of the Credit Ombud for FREE assistance if they experience any issues relating to non-bank credit agreements with credit providers such as the clothing and furniture retailers as well as micro-lenders, fraudulent listings, emolument attachment orders (“garnishee orders”) or general complaints about their credit bureau listings.
Call 0861 66 28 37 or send an SMS to 44786 email firstname.lastname@example.org or go to www.creditombud.org.za.