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The Danger Of Discount Cards

Store discount cards are popping up everywhere now, from your local grocery store to warehouse clubs. These cards are promoted as a way for customers to get increased savings on everyday items. Discount cards can be a good thing if they really allow you to save on items that would have cost you more elsewhere. Discount items can also be a bad thing because they can trick customers into believing that they are saving money when in fact they are not.

Here are 4 places where a discount card may not be all that it is cracked up to be:

1. Convenience store discount cards

Convenience stores are now offering discount cards to customers. Customers at CVS and Rite Aid are unable to purchase products on sale without these cards. Although discount cards may sound like a good deal, they are not all that they are cracked up to be. I have discovered that many “discounted” items sold at CVS and Rite Aid are still much more expensive than at my local grocer’s non-discounted prices. Convenience stores have such a huge markup on products that they can discount items and they will still cost substantially more than similar products at the average grocery store. Don’t be fooled by what looks like a drastic markdown in price. This lower price may still be expensive!

2. Health and fitness stores cards

Discount cards are the new thing at health stores that sell vitamins and supplements. Many of these stores like GNC charge an annual fee in order to become a member. I signed up for a GNC discount card and was surprised by all of the catches. You can only save money the first week of each month. After that, prices rise dramatically. Also, I found that even with the discounted prices many items were more expensive than at competitor stores such as The Vitamin Shoppe.

3. Discount travel programs

Travel discount programs often offer big savings on vacation travel anywhere in the world. They promise to save you money on flights, hotels, and car rentals. Customers often find that these discount programs fail to live up to their promises. Travel may be limited to only off-season travel. Hotel room stays may only be discounted during weekdays and at the least frequented times. Car rentals may not apply to the model that you wanted. Also, sometimes these programs have automatically renewals that will continue to bill you if you forget to cancel. Do your research ahead of time and make sure these programs will actually benefit your lifestyle and needs.

4. Dental discount cards

The trip to the dentist can be painful enough. Who wouldn’t want to save money on their dental visit? Dental discount cards are promoted as a way to obtain substantial savings on dental care. This is not always the case however. Card buyers often mistake dental discount cards for dental insurance. Customers are often shocked to learn that their dentist does not take their discount cards. You may end up being forced to drive clear across town to a new dentist in order to have your card honored .

Remember that all of these cards are not bad. You have to evaluate them on a case-by-case basis. Remember to “comparison shop” as well. A discount card at one grocer may be a great deal whereas a discount card at another grocer might actually end up costing you money. You’ll need to do your homework.

(Photo credit: jessica mullen)

Mark Riddix
Mark Riddix is the founder and president of an independent investment advisory firm that provides personalized investing and asset management consulting. Mark has written financial columns for Baltimore and Washington, D.C. area newspapers and is the author of the book, "Your Financial Playbook."

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