By Nathan Rice

“Attention Kmart shoppers.” This one little phrase used to make consumers stop in their tracks as they waited to hear the announcement of the next blue light special.

An item would be mentioned, a blue light would flash next to that item, and shoppers would flood to the discounted item like moths to a flame.

Unlike moths, however, shoppers weren’t drawn to the item because of a flashing blue light. Their attention was grabbed, because they knew they could get an item at a lower price.

Americans love a bargain. We are drawn to sales, and we love to tell our friends how we got something “at a steal.”

The blue light special is now a part of retail and marketing history, but shoppers are still looking for items at a discounted price. Companies know this, and they do everything they can to make you feel like you’ve received a bargain.

Sometimes, though, these bargains aren’t all that they appear to be. I once saw an item with a discounted price advertised. I glanced at the original price and found out that I would be saving a whopping three cents!

Sales are great, but we must make sure that we are actually getting a good deal and not simply getting pulled in by a fancy sign or a good marketing strategy.

We should pay especially close attention to any item we are going to finance. We often look solely at the base price of an item, but financing will quickly change how much we are actually paying.

Some companies list low prices, but charge an incredibly high interest rate on the purchase, which allows them to make more on the financing of an item than on the actual purchase.

Make sure that you are asking about the APR whenever you finance an item. The APR, or Annual Percentage Rate, determines how much interest you will pay. The higher the APR, the more interest you will pay.

Also, do not be afraid to ask how much you will actually be paying for the item. Financial agreements should always clearly list the total amount paid over the life of the loan, along with the total amount of interest paid.

These disclosures may help you discover that the bargain you think you’re receiving isn’t such a good deal after all.

We sometimes even fail to calculate the cost of financing when making a large purchase.

Take the example of a vehicle purchase. Drawn in by the air-blown ribbon-man frantically waving his arms, we spot our dream car, and the salesperson asks what it would take to get us in that car today. We negotiate with the salesperson, agree upon a monthly payment that fits within our budget, and we sign on the dotted line.

The monthly payment is important, but it is only a piece of the financial agreement that we need to consider when making a big purchase. The APR you agree upon in the finance agreement makes a big difference in the overall cost.

A $25,000 loan with a 60-month term at a rate of 3.00 percent will cost about $1,950 in interest over the life of the loan. If, however, the rate is 14.00 percent, the total interest paid during the same 60 months will total more than $9,900.

In this one example, the total amount actually paid for the vehicle would vary from $26,950 to $34,900 based on the rate of the finance agreement.

Keep looking for sales, and don’t be afraid of a good bargain. There may not be any more blue light specials, but there are still good deals to be found.

Just make sure you know the actual price you will be paying for an item.

Nathan Rice is the Relationship Manager of the Downtown Suffolk branch of ABNB Federal Credit Union. He is a Hampton Roads native and can be reached at nrice@abnb.org.