I always like to get the best value for my money. To achieve this, we have a rule in our family that no purchase is made until we’ve made some price comparisons. It’s really easy to do this for grocery items and other smaller type purchases. When purchasing larger value items we prefer to have 3 or 4 comparison prices to choose from. While it may be more time consuming to do this (for example calling on several auto insurance agents for quotes,) the process helps us to know if we really are getting a good deal or not. Sometimes we’ve been successful at getting an even better deal by having them compete against each other for our business.
Likewise, we compare prices when evaluating the purchase of financial products. By financial products I mean life/homeowner’s insurance, credit cards, a mortgage, loans, etc. These items are a little more difficult to comparison shop for but you could use an online site like Totally Money to help compare financial products. If you stick to a few basic questions, you should be able to make some comparisons that will guide you in your decision making:
Find Out What Costs and Fees are involved
Many times there are administrative costs and fees involved with the purchase of a financial product. You’ll want to find out what those costs are and especially if any of them are ongoing. Try to secure a fee chart or fee schedule. In the case of a credit card, you’d want to find out the annual interest rate, annual fees, and when any introductory rate expires. It’s always a good idea to read all the fine print on any credit card offers; you may be surprised the details you can find there.
What Are The Terms or Conditions
For savings and investment type products you’ll want to know items such as maturity date (how long your money is tied up), if there are any early withdrawal penalties, what type of return you can expect, and how that return will be paid. If you feel you don’t clearly understand the terms or conditions, ask questions and make sure you have answers you are satisfied with before handing over your money.
Are There Any Risks Involved
When putting your money into any type of savings or investment instrument, you’ll want to find out if it is insured by the FDIC or through some other type of insurance. Be sure you understand the risks involved before making any investment.
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