Sometimes, the key to saving money is to ignore the guy who's trying to sell you stuff you don't need.
Salespeople -- especially those on commission -- love to turn a big purchase into a bigger purchase by convincing you to add extra stuff to your shopping cart. These upsells can happen virtually any time you're trying to make a purchase, whether it's a laptop, a car or a simple pair of jeans. And sometimes the upsell might make sense: seat warmers for your new car, bacon on your burger, the right shirt for that new pair of slacks.
But more often, these sales pitches are intended to sell you on something you really have no use for, and serve only to pad the company's profits by preying on customers' ignorance. Here a few upsells you should greet with a lot of skepticism.
Banks including Capital One (COF) and Chase (JPM) have gotten in big trouble lately for selling customers pricey credit monitoring services, then failing to deliver the promised benefit. The Consumer Financial Protection Bureau has been handing out big fines, and even larger reimbursement orders.
Erik Larson of NextAdvisor, which has reviewed credit monitoring services, says that many banks are now thinking twice about offering credit monitoring at all as a result of these fines. But if your bank does try to sell you on this sort of service, you should probably shop around to see if you're really getting the best deal.
When evaluating such a service, the key factor to consider is whether it's going to give you a complete picture of your credit situation.
"Not all lenders report to all three bureaus," he explains. "Some [monitoring services] give you all three bureaus, while some just give you your report from one bureau -- and they're quite expensive." If you missed a medical bill but it only got reported to Experian, a credit monitoring service that only pulls your Equifax report isn't going to help you.
NextAdvisor's reviews gave top marks to Identity Guard, Free Scores and More and PrivacyGuard; FreeCreditScore.com, which only monitors your Experian score and costs $17.99 a month, brought up the rear.
If you buy a computer, TV or other expensive electronic device at a retailer, expect to get a hard sell on an extended warranty. As a general rule, you should politely decline it.
Consumer Reports has argued persuasively that your device probably won't break during the period covered by most extended warranties -- and even if it does, it will cost about as much to repair it as you would have spent on the warranty.
"They are super high-margin products for [retailers] typically," notes Larson. "If they're that high-margin, then it's probably not a great deal for the people buying them." Plus, he adds, many of these warranties are filled with loopholes that lessen their actual value -- for instance, they might stipulate that you device will be replaced by a refurbished model rather than a new one.
Some retailers' protection plans are worth the cost -- if you're clumsy with your smartphone, it might make sense to pay $100 for AppleCare on your new iPhone. But in general, resist the point-of-sale upsell; if you decide you really want insurance on your new device, you'll probably get a better deal from a third-party warranty provider like SquareTrade.
Pricey HDMI Cables
Retailers like Best Buy rely a lot on warranties to pad their profit margins, but that's not the only way they getting by during periods of weak sales of consumer electronics. Another popular tactic is to upsell you on pricey accessories you don't need.
A classic example is the HDMI cable. Yes, it's required to get an HD feed to your TV from a cable box, video game system or set-top box. But it's not supposed to be expensive. Retailers are famous for charging big bucks for "premium" cables, but experts agree that there's no difference in picture quality between an $80 gold-plated cable you buy at the store and a $5 cable you get online.
Store Credit Cards
This is the rare upsell that actually saves you money: Many retailers will give you a nice discount if you sign up for a store credit card at the point of purchase. And expect a hard sell from the cashier or associate, who probably has an incentive (either carrot or stick) to push these cards to customers.
But before you sign up to score that 15 percent discount, consider that store credit cards tend to have higher interest rates and lower limits than a typical card. Furthermore, applying for the card is going to mean a temporary hit to your credit score, which could cost you in other ways if you're applying for a loan soon.
If you don't plan on carrying a balance, and there isn't a mortgage application in your near future, it may be worth it. That's especially true when you're at the cash register with a big purchase: If you're spending $1,000 on a few suits, some shirts and accessories, then a 15 to 20 percent sign-up discount is in line with the bonus you'd get for signing up for a major rewards card.
But please don't sign up for a credit card just to save $5 on a pair of cargo shorts. You're better than that.
Undercarriage Rust Guards (and Other Car Add-Ons)
Nowhere will you find more upselling than at a car dealership. Cars are generally sold with a bevy of optional features that can raise the price by thousands of dollars, and you'd better believe the dealer will try to sell you on all of them. It's up to you to decide which ones are attractive to you.
But some of these options are to be avoided. David Kiley of AOL Autos says that one classic example is undercarriage rust-proofing, which is intended to protect the car from harsh weather conditions and salty roads.
"Our advice on this is, don't get it done at a dealer," he says. "If you live in an area where you want extra undercarriage corrosion protection, the version you get at dealership is not what you want. You want a specialty shop that does a more thorough and higher-grade version."
(AOL Autos has a good look at other vehicle "extras" you should and shouldn't buy.)
Extended Auto Warranties
Extended warranties aren't just for laptops. They're also to be found at car lots, and Kiley says he tends to steer clear of them.
"I've never bought one for a car," he says. "They are typically full of careful language -- you might well find that if something goes wrong after the basic warranty [period], the thing you think is covered won't be."
Of course, there are some instances where it's worth the extra cost. But you have to do your research to be sure. AOL Autos lists some of the questions you should be asking before you buy an extended warranty on your new car, including who's servicing it, what the deductible is, and what is and isn't covered by the warranty. In other words, do your homework.
But that's true of any situation where a salesperson is trying to upsell you on an accessory or warranty. After all, if you're buying a car or laptop, it's likely that you first did hours of research and comparison shopping to inform your decision. So why would you suddenly add hundreds to your purchase price based on a two-minute pitch from salesperson working on commission?
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.
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