Seven Top Strategies for Being a Smart Consumer
Last updated June 28, 2023
We asked our editors and consumer-expert friends to tell us the most important ways to save money and avoid trouble. Here are their top seven strategies:
Listen to audio highlights of the story below:
Tip #1: Comparison shopping will save you a bundle.
Getting at least a few prices is the only way to know whether you are getting a good deal, and it’s especially important before hiring local services. When Checkbook’s undercover shoppers collect bids from plumbers, roofers, electricians, veterinarians, auto repair shops, and just about all the service providers we evaluate, we find some companies charge two or even three times more than others for the exact same work.
“Do not assume that a high price means you’ll get better service or products, or that a low price means lousy work,” said Kevin Brasler, Checkbook’s executive editor. “The saying that ‘You get what you pay for’ is a myth when it comes to local services. For more than 40 years, our research has consistently found that there is no relationship between quality and price.”
Our ratings can help you identify high-quality, low-cost service providers. Many of our articles report prices quoted to our team of undercover shoppers or price comparison scores, which are based on costs we collected.
More from Checkbook: Top Shopping Tips
Tip #2: Pay with a credit card.
I often urge consumers to use credit cards whenever possible; it is one of the best ways to protect yourself from fraud and shoddy service. When you use a credit card to pay for a product or service, you automatically get strong protections under the federal Fair Credit Billing Act. This law protects you from fraud by requiring credit card companies—not consumers—to deal with fraudulent charges and by requiring credit card companies to offer customers a chance to dispute charges for products or services that were unsatisfactory or not delivered.
“Credit card companies overwhelmingly side on behalf of consumers in these disputes,” Brasler said. “While you don’t eliminate the entire headache of dealing with a lousy or unresponsive company, at least you can get your money back.”
Most debit cards offer dispute resolution protections, but credit cards are better because debit-card issuers tend to be stingier about doing chargebacks. Also, with debit cards the money spent on disputed transactions is gone from your bank account until you obtain a remedy.
More from Checkbook:
Credit Cards Provide Strong Protections for Consumers
Why It’s Safer to Use a Credit Card, Not a Debit Card
Tip #3: Be extremely careful when using peer-to-peer payment apps.
Peer-to-peer (P2P) companies such as Cash App, Venmo, and Zelle can be convenient ways to pay and get paid without setting up accounts with conventional banks. But they’ve become a favorite tool of criminals, who love that these apps transfer money instantly and make it nearly impossible to recover funds.
P2P apps were designed for sending money between friends, such as when you want to split the check at dinner. But the apps themselves warn that they are not a safe way to shop online or to send money to someone you don’t know; unlike credit cards and checking accounts, P2P apps lack fraud protections.
“You don’t have much recourse if you send money and don’t get the product or service you thought you purchased,” said Kimberly Palmer, senior writer and spokesperson for NerdWallet, a personal finance website.
More from Checkbook: Complaints Against P2P Payment Apps Soar
Tip #4: Review business relationships.
Most consumers sign up for services that they pay for month after month without ever reevaluating their value.
Edgar Dworsky, publisher of ConsumerWorld.org, recommends checking your cable and cellphone bills, bank accounts, and credit card accounts every year or two.
“Maybe you’re not getting the best rate, the best package, or the best price anymore,” Dworsky said. “In many cases, we’re talking about big savings.”
With credit cards, decide whether the perks you get are still important to you. Maybe you got a travel rewards card but now aren’t taking as many vacations, or the annual fee has skyrocketed.
For phone, internet, and TV service, you might find your current company now offers a package or plan that provides more for less. Don’t expect the company to offer this voluntarily—you need to be proactive. Call or go to the store and ask: “How can I lower my monthly bill?” If you’ve done your homework—especially if you know a competitor is offering a better deal—you’ll have more bargaining power.
Don’t forget to cancel all the subscriptions you’ve signed up for but no longer use. “Many of these just keep going and going,” Dworsky noted. “If you don’t stop them, you’re going to keep getting charged, maybe with a price that’s too high.”
Every few years, collect auto and home insurance quotes from several companies to make sure you’re paying fair premiums. Checkbook’s researchers find that most consumers can save hundreds of dollars each year just by switching to lower-cost auto and home insurers.
More from Checkbook:
Ratings of Home Insurance Companies
Ratings of Auto Insurance Companies
Tip #5: Slow down when you’re being rushed.
Con artists often use fear or pressure tactics, including threatening lawsuits or arrest, to get their victims to act without thinking. The pressure can be so intense that by the time you realize you’re dealing with a crook, your money is already gone, or you’ve provided personal information that they can use to steal your identity.
Many victims say they felt something wasn’t right at the time they were being pressured by the fraudster, but they didn’t act on that feeling.
“Listen to your gut,” said Amy Nofziger, director of fraud victim support for AARP. “It’s actually a chemical reaction from your brain trying to warn you that something is not right. Talk to someone that you trust about the situation.”
AARP’s Fraud Watch Network Helpline (877-908-3360) has experts who can help you figure out what to do. You don’t have to be an AARP member to use this service.
More from AARP: Americans Lost Record-Breaking $8.8 Billion to Scams in 2022
More from Checkbook: Identity and Cyber Theft: How to Protect Yourself
Tip #6: Report scams.
If you get scammed, don’t blame yourself; fraudsters are incredibly persuasive and know many tricks. Instead, seek help from your bank or credit card company. And make a difference by reporting it to your local police department, local government consumer protection agency, the Federal Trade Commission (FTC), Fraud.org, and/or the BBB Scam Tracker.
“While you might not get your money back, you’ll help investigators spot trends to build cases,” said John Breyault, who runs Fraud.org, a program of the National Consumers League. The organization confidentially shares complaints with more than 200 consumer and law enforcement agencies throughout the U.S. and Canada.
“And believe it or not, these scammers do get caught and put behind bars. Not all the time, but if nobody reports it, they’re never going to go to jail,” Breyault said. “The regulators and the enforcement agencies that protect us need evidence, and that evidence usually starts with people like you and me.”
More from Fraud.org: Let’s all speak up about fraud
Tip #7: Watch over your credit.
Identity theft often goes unreported because it’s not detected. Periodically use AnnualCreditReport.com to obtain your free credit reports from each of the big three credit bureaus: Experian, Equifax, and TransUnion.
Don’t search online for “free credit reports.” There are too many sketchy companies offering products you don’t need. AnnualCreditReport.com is safe and was authorized by federal law.
Review your reports and investigate any accounts you didn’t open, names or addresses that aren’t yours, or records of late payments you didn’t make.
You should freeze your credit files with each of the three major credit bureaus. Do so for yourself and any dependent children. After you do so, criminals won’t be able to open new accounts in your name without the PIN you set up. Placing credit freezes is free and you can do it online easily and quickly by visiting equifax.com, experian.com, and transunion.com. Freezes do not affect credit scores and you can thaw your account quickly should you need to apply for credit.
More Info from Checkbook:
Identity Theft: Are You Protecting Your Kids?
Credit Score Myths vs. Reality: Don’t Let These Common Misconceptions Hold You Back
Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and NBCNews.com. You can also find him on Facebook, Twitter, and at ConsumerMan.com.