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Home-shopping channel addiction: A fast path to credit card debt

Charging from the sofa is comfortable, convenient -- but can get out of hand

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If home shopping is causing you to bust your budget or descend into debt, it's time to switch channels -- perhaps permanently.

Why home shopping is successful
Many local cable companies host televised retailers, but the frontrunners are QVC (Quality, Value, Convenience) and HSN (Home Shopping Network). Big or small, though, the formats are the same: Hosts present products from specific companies, such as Philosophy skin-care items and Dell computers, or focus on a category of items, such as handbags and cookware, from various lines. Company representatives -- who are sometimes top-tier celebrities and designers -- are present to answer questions. A few lucky customers even make it on air to chat with them. This brush with fame spurs excitement.

10 expenses "Home shopping is mesmerizing," says Laura Clifford, of Walnut Creek, Calif. "You get yourself into a frenzy!"

Into debt, too. Clifford says she took out a $15,000 loan from her credit union to pay off her credit card balances, the bulk of which was from home shopping. What did she buy? Cubic zirconia, silver chains, a vacuum cleaner, microwave Tupperware and much more.

The casual, relatable sales techniques makes home shopping compelling. "It's an over-the-fence, backyard conversation," says Nick Romer, author of "Make Millions by Selling on QVC." Romer, who has represented his own line of arts and crafts tools on QVC and is now with HSN, has sold over $14 million worth of products.

"You're selling benefits, not features," says Romer. "If I tell you this lipstick will stay on your lips even after a dip in the Caribbean, well, that's a picture I'm painting for you." This strategy works, as it creates an intimate and applicable experience.

It's hard to beat a great pitch, too, as Cynthia Ballard Borris, a writer from San Lorenzo, Calif., discovered. "I think after watching over and over again how wonderful these binoculars with a zoom and a camera were, and that there were only five left, really got to me!," recalls Borris, who says she was influenced by the marketing and regretted the $100 purchase.

So what's the problem?
There's nothing wrong with stocking up on necessities, but if you're trying to stick to a spending plan, the soft sell mixed with entertainment, 24-hour a day access and purchasing simplicity can lead to buyer's remorse. The payment methods can also be seductive and expensive:

  • Installments. Both HSN and QVC offer the ability to spread the cost of an item out over a few months if you pay with your credit card. However, the psychological impact of doing so creates the illusion that you're not really spending as much as you are. Hosts often stress the monthly payment versus the actual cost.
  • Costly credit cards. Home shopping company credit cards tend to have higher interest rates than general purpose cards. The QVC's Q card, issued by GE Money Bank, for example, sports a 24.99 percent APR and HSN's card, issued by World Financial Capital Bank, is 26.99 percent. The average rate for a new general purpose card is about 15 percent.
  • Auto-delivery. For such things as skin-care products and foodstuffs, you may be able to save on shipping or "lock in" low pricing by enrolling in a program where they send additional items automatically. This is great if you need a monthly cheesecake, but it's not so good if you really can't afford to shell out that extra money on a regular basis.
  • Remote control purchasing. A recent development is the ability to buy directly from your TV remote control. To make a purchase, all you have to do is press the "OK" button. Impulse shopping has never been easier.

Customers most susceptible to home shopping debt
The segment of people who get into the most financial trouble with home shopping are collectors, says Steve Rhode, founder of GetoutOfDebt.org, based in Raleigh, N.C. There are many lines of collectibles featured on both HSN and QVC -- from coins to artwork. In fact, a community board set up by QVC reveals the problems associated with collecting such items. A poster identifying herself as "TomGirl" initiated a recent thread:

You have to know when to walk away. Go make yourself a cup of tea, and when you come back, you can think about it more clearly.

-- Cynthia Ballard Borris
Writer, San Lorenzo, Calif.

"I was thinking about phases I've gone thru with QVC where I had to have EVERY one of a particular item...I went thru a "cotton throw" stage -- I have a MILLION of them in original packages that I will NEVER use if I have a thousand beds!!! And down blankets. I am single and have a DOZEN queen/king sizes. If it had 1/2 oz more down, I HAD to have it!!! I put the brakes on it when I started with the Temptations [ceramic cookware]. I could host a dinner party for 50 people and give them each 2 pieces!!!!!!!!! OK.... I told -- who else is brave enuf to play?!?!?!?!!!!!!"

Dozens of commiserating customers responded to her challenge. Rhode isn't surprised. "It's very hard for collectors to stop buying," he says. "It's the thrill of the hunt."

Furthermore, the hosts can seem like friends, especially for those who are loners or are homebound, as their very warmth provides a sense of trust and camaraderie. "Shoppers get an emotional benefit," says Rhode. "QVC and HSN do a lot of things that foster that feeling. They even have an online community where you can talk to the hosts." 

Clifford agrees. "There's something about watching it on TV ... it's the personalities of the people they hire. They made me feel like I wasn't alone. It's having someone to talk to and they make you feel special. When you're going through a depression, it's dangerous. It's like TV Prozac!"

Can't stop shopping? Yes, touch that dial
To keep home shopping (and your net worth) positive, Rhode recommends setting a maximum amount you want to spend each month. "You don't need to cut out all home shopping. Set an internal restriction. Give yourself permission to buy one thing per week. This way, you're creating a boundary, and you're intensifying the positive feeling of doing it in the first place."

Bruce McClary, spokesman for ClearPoint Credit Counseling Solutions, headquartered in Richmond, Va., offers additional tips to the home shopper: 

  • Use the least expensive payment method. Don't think you have to apply for the company's card.
  • Repay what you do charge in full before the due date.
  • Be wary of the installment option. Sit down and total the real cost before purchasing.
  • Avoid auto-delivery. Chances are high that you won't terminate it before overbuying.
  • Stop and think before purchasing -- no matter how few are left

Clifford says that checking out the item on your computer can also prevent impulse purchases. "It often doesn't look that amazing online."

And pay attention to when you shop, says Borris. The time of day she was watching had a lot to do with her pricey binoculars. "If I'm up in the middle of the night, I tend to buy more. I avoid those times now." Her advice: "You have to know when to walk away. Go make yourself a cup of tea, and when you come back, you can think about it more clearly."

Finally, if the lure of home shopping is too strong and limiting yourself isn't working, Rhode says to pull the plug. "Call your cable company and get rid of the channels."

See related: Credit card addiction: How to break the spending cycle, QA: Avis Cardella writes on overcoming shopping addiction, Severe debt can cause depression and even suicide, Hoarders: Buried in debt

Published: November 29, 2010


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