Most financial decisions seem to begin with one question: Where to start? Whether you’re looking for a loan, an insurance policy or a credit card, you may feel overwhelmed with options. In many cases, you may just grab any offer, turn to the internet for advice or just get what your bank offers. But is that route the best for you?
For many people who are in the market for financial products, the offerings are often more than they can compare. Thinking of getting a credit card? Each bank offers a variety of cards, and each comes with a variety of perks and benefits. The end result of most people is often to grab what comes their way — like through a proactive sales person — or online. After all, all products may seem pretty close in their features and offerings, and the savings don’t seem to matter.
But when you take such an attitude in purchasing financial products, you often end up paying more than you need to, or missing out on more convenient or better services. How can you navigate your way through the abundance of offerings? Here are a few tips to keep in mind.
Know what you need
While you can always check for all the features that a financial product offers, stay laser-focused on your needs. For example, if you’re price-sensitive, eliminate immediately all the products that fall beyond your budget or include ongoing costs. Get a free-for-life credit card, for example, with the lowest APR and fees you could get. If you don’t care about perks like restaurant discounts or travel specials, just ignore them.
Your focus on what you want to accomplish and get with your product is the best way to proceed. Don’t be distracted by all the offers and perks that may never be used. Instead, ask for your list of priorities, and you probably will find a product that meets as many as possible.
Assess aggressive sales pitches
Once you’re in the market for any financial product or service, you are likely to become a target to online ads, direct mail, and even phone calls. When someone reaches out to you, it only means this person has received your information. If you have time to listen to their offering without being pressured into buying anything, do it. Make sure that you compare offers closely and don’t rush into committing too soon to any particular offer.
Aggressive sales people also will try to collect as much information about your situation as possible. So before you divulge any additional personal or financial information, think of what this will be used for — probably future sales.
Compare apples to apples
Bank and insurance offers typically highlight their own benefits. For example, a life insurance policy provider may promote the ease and convenience of getting the policy with a medical check-up, but when you look at the pricing, it might be higher than the price for a policy that requires an extensive check-up. If price trumps convenience in your view, then you may go with what fits your budget or gives you a better bang for your buck.
In particular, look for running costs. For example, a credit card that comes with a much higher APR could mean thousands of dirhams if you do carry a balance from month to month. Having some cool perks bundled with this card doesn’t make it better than a card that offers a lower APR.
Once you get started and collect various offers from various providers, stop and compare what you have. You will be able to see through the patterns clearly. Once you find what type of product you are looking for, make a shortlist of provider, then select the one you’d like to work with based on secondary factors.
The writer, a former Gulf News Business Features Editor, is a Seattle-based editor.
Get and compare financial products
Do your independent research
Don’t be distracted with offers and perks
Protect your personal and financial data
Think of costs and benefits as priorities
R.O.
