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Amazon Prime Day is a two-day event this year starting on June 21, and for many, the shopping event could mean epic savings. For others, retail holidays can spell financial trouble as the allure of sales and deep discounts can lead consumers to spend beyond their means.
If you want to avoid overspending this Amazon Prime Day, check out the following tips to help you stay within your budget.
Review Your Budget and Stick to It
The best way to avoid overspending is having a budget and sticking to it. Without a budget, you'll have no guardrails helping you determine how much you can afford to spend and may lose control when faced with fleeting deals on hot products.
If you have an existing budget, review it to see what wiggle room there is for discretionary retail spending. Looking for household products? You may be able to slot your Amazon Prime Day spending into that budget category. If you're looking for a bigger-ticket item, see how it fits in—if at all—with your allotted monthly spending money. Once you add up how much you can spend comfortably without sidetracking your budget, make that amount your spending limit for Amazon Prime Day purchases.
If you're already setting aside savings for holiday purchases, this could be a great opportunity to get a head start. Amazon Prime Day happens only once a year, and it could be the one day you get the majority of your holiday gift shopping done. Just be sure to read return policies to know whether your purchases will extend past return periods if you're hoping to use them for holidays late in the year. If you opt to dip into your savings, make a plan to replenish what you took—and be sure to follow through. While using your holiday savings can be a great money-saving strategy, using the money in your emergency fund to make Amazon Prime Day purchases isn't a good idea.
If you don't have a budget and aren't sure what you can afford to spend on Prime Day, take a look at your expenses for the rest of the month and see how much you'll have leftover. Then commit to creating a budget as soon as you can. It's not hard: Your budget essentially takes your monthly income, and subtracts your set monthly expenses. The remaining cash is then allotted for saving, discretionary spending and paying down debt. A couple budgeting methods to explore include the 50/30/20 budget and the zero-based budgeting method.
Check to See if the Item Is a Good Deal
Just because something is on sale on Amazon, that doesn't mean that's the lowest price available. Amazon offers thousands of different products from retailers all around the world, and while the site is commonly known to have some of the lowest prices, some items may actually be cheaper elsewhere.
When shopping on Amazon Prime Day, always leave yourself time to cross-check other retailers online to ensure you're getting the best deal possible. Price comparison sites like CamelCamelCamel can even show you price fluctuations over time.
Offset Your Costs by Paying With a Rewards Credit Card
If you have a rewards credit card, consider using it this Prime Day to offset your purchases by earning points, miles or cash back. Depending on what card you have, and what rewards program it manages (for example, Chase Ultimate Rewards), you'll have different options for how you can earn or redeem your points or cash back.
If you're looking to pay as little as possible for your Prime Day purchases, a card with generous cash back could be a good option.
If you're hoping to avoid paying interest on any big-ticket items you may buy, a card with a 0% introductory APR on purchases could save you a lot of money. Just be sure to pay off your purchases before the introductory period ends to avoid paying any interest on your Prime Day products.
Trying to earn points for an upcoming vacation? If you have a card that offers generous point or mile earnings, that could be your best bet for Prime Day shopping. While you'll want to pay off your purchases as quickly as possible to make sure you get your full rewards earnings, committing to charging and then paying off those purchases right away could help you squeeze extra value from your upcoming trip.
To learn more about reward credit cards you may be eligible for, consider using Experian CreditMatch™ to get paired with personalized credit card offers based on your credit profile.
The Bottom Line
Amazon Prime Day offers a good opportunity to maximize your savings on items you'd already be purchasing anyway or special items you've been saving up for. To avoid overspending on Prime Day, be aware of your budget and how much you can spend without going into debt, do a price comparison to ensure you're getting the best deal, and consider using a credit card that will earn you points or cash back (as long as you know you'll pay off the purchases quickly).