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When taking the upsell is worth it

Personal Finance

Last year, my boyfriend and I celebrated Christmas with tickets to see the Broadway musical “Wicked.”

A cocktail served in a glass

Caught up in the splendor of the holidays in New York City, we decided to indulge in some horrifically overpriced theater cocktails.

As the bartender began pouring my boyfriend’s gin and tonic, he asked “Just one shot, or would you rather make it a double?”

After a moment of hesitation, my boyfriend said sure and took the upsell, suddenly making a $12 drink $20.

The horrified expression on his face when he heard the price for the double-shot gin and tonic is burned into my mind as an example of when to avoid an upsell.

But there are moments when the upsell may actually make sense.

I avoid the upsell unless it proves to be useful in other ways.

Whether it’s a movie theater concession attendant asking if I want to upgrade to a medium popcorn for a dollar or an airline website suggesting I pay an extra $25 to upgrade to priority boarding, I always say “no thanks.”

But, last month I took a remarkably out-of-character upsell.

While perusing the clearance rack at Banana Republic, I overheard a store associate tell another customer about the store-wide sale. Shoppers could get 40 percent off the already marked down items, plus an additional 15 percent off a full-priced item by opening a store card.

As an infrequent shopper, I knew the card wouldn’t carry much value for me outside that first purchase.

The rewards on a store card rarely offer more than one percent back. And if you ever carry a balance, you get hit with horrifically high interest rates.

But, despite what I already knew, I was out expanding my professional wardrobe and had allocated a budget of about $200 to the need. By opening a store card, I could expand my Banana Republic purchasing power.

It was almost enough to tip the scales in favor of opening a credit card.

And then another thought came to me while evaluating my mountain of potential purchases.

As a rare, debt-free millennial I didn’t have student loans – or any kind of loan – to use to build credit history.

Previously, I always relied on being a responsible credit card user to establish credit history and build a strong credit score. This store card represented another opportunity to continue climbing to a higher score, which would be useful in case I ever did need a loan.

With that thought in mind, I chose the upsell and opened the card.

Credit card upsells can decrease utilization rates and help your credit score.

Ideally, you should keep your utilization rate below 30 percent. One way to drop your utilization is to increase your amount of available credit.

By opening a store credit card and adding it to my collection of “cards I rarely use”, I could expand my available credit and drive down my utilization. That is assuming I didn’t give into any lifestyle inflation with the extra credit.

A store credit card can also be useful for people trying to build their credit scores as you are more likely to be approved with a lower score than you would by going directly to Visa, MasterCard, American Express or other companies.

When considering opening another line of credit, it’s important to know yourself. Tweet this

If you know you couldn’t open another card without running up a bill and carrying a balance, this strategy isn’t right for you. It also isn’t wise to open a bunch of credit cards all at once.

When you apply for a credit card, it results in a hard inquiry on your credit report. Though typically small, this will cause a drop in your credit score.

Too many inquires in a short period of time is a red flag to both lenders and credit card companies.

Taking an upsell means parting with more of your hard-earned dollars – approach with caution.

Be careful not to jump into a credit card deal, purchase add-ons to financial policies or even say yes to a bartender’s offer for a double shot in your favorite cocktail without considering what it means for your bank account. You work hard to earn that money, so you want to be careful to not blow it on an item or service that’s not worth it.

First, take a moment to evaluate the consequences of your decisions instead of feeling pressured to make a choice in seconds. Nothing’s worse for your pocketbook than buyer’s remorse.

But, that doesn’t mean there aren’t times where it makes sense to go ahead and accept the upsell offer.

As long as you’ve done your research and asked enough questions, don’t be afraid to take the upsell and use it to your advantage.

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