July 29, 2014 in Credit Cards

How TV affects your credit card spending

A few years ago, popular television sitcom “Modern Family” nearly drove up the costs of Leah Ingram’s home renovations. Ingram, founder of SuddenlyFrugal.com, discovered that Benjamin Moore sold the color — an aptly named Labrador Blue — featured on the walls of the Dunphy home.

“It affected my thinking and had me considering buying more expensive paint,” she recalls. Ultimately, Ingram opted for a cheaper product, but the experience stuck with her.

“You think you’re watching a funny show about a modern family,” she says, but you’re simultaneously getting inspiration for home design projects that may or may not be within your budget.

“Modern Family,” of course, isn’t the only show likely to influence our spending habits.

All television shows “are targeted toward particular audiences,” says Michael McCall, professor and chair of the marketing department at Ithaca College in New York. Advertisers, in turn, pay for commercial air time or product placement during a show that shares its target demographic. So, on a very basic level, your favorite television program is likely to feature advertisements for products you’re more apt to want and/or purchase.

There are some shows, however, that are more likely to drive up your credit card bills.

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Generally speaking, ratings juggernauts, like “The Big Bang Theory” or the aforementioned “Modern Family,” are going to attract advertisers. But there’s another category of shows that’s even more appealing from a marketing perspective.

“Advertisers like live events, because people … don’t usually DVR them and won’t skip over the commercials,” says Steven J. Lanzano, president and chief executive officer of the Television Bureau of Advertising.

As such, if you’re in the habit of watching live events, like the Super Bowl or the Olympics, you’re likely to be bombarded with often-elaborate and/or integrated advertising campaigns. (Think Ellen DeGeneres taking a selfie with a Samsung device at the 86th Academy Awards.)

Similarly, companies are also inclined to ramp up their marketing during shows that are popular on social media, Lanzano says.

Hard-core fans will discuss major plot points on popular sites like Facebook and Twitter. More viewers, in turn, will watch these programs in real time in order to avoid spoiling, say, what happens to Walter White or who won the latest seasons of “American Idol” and “Dancing With the Stars.” The online chatter provides advertisers with a new platform for pitching their products.

“It becomes basically real-time water cooler talk,” Lanzano explains. “This whole social media phenomenon has been good (for television).”

Additionally, if you watch a lot of shows online, you need to brace yourself for other marketing tactics, including targeted advertisements derived from your browser’s history, or even the option to make purchases with one click of your mouse.

“It’s so easy to get sucked in,” Ingram says.

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Joneses Kardashians

Being bombarded by a variety of ads isn’t the only way that television can drive up your credit card spending. Some programs themselves may be subconsciously causing you to pull out the plastic.

People are wired to keep up with the Joneses, says Michael Norton, coauthor of “Happy Money: The Science of Smarter Spending” and a professor at Harvard Business School. Usually, the “Joneses” you compare yourself to live next door or across the street. But watching shows with affluent characters or stars, like the reality-based “Keeping Up With the Kardashians” or Bravo’s “Real Housewives,” can change this point of reference.

“Instead of just looking at your neighbor, you’re looking at the wealthiest people in the world,” Norton says. And, yes, you may be inclined to purchase products you can’t afford in order to emulate them.

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Consumers may also be inadvertently using television shows, in general, as a screening tool.

“We live in a review-based society,” Ingram says. So, seeing a product being used on Rachael Ray’s show could double as a four-star endorsement … and the go-ahead to buy an item decidedly outside your price range.

Think the sales of Manolo Blahniks and overpriced cupcakes spiking, thanks to Carrie Bradshaw and company on “Sex and the City.”

The opportunity to send a slightly subliminal message is why you’ll continue to see the judges on American Idol drinking Coke or Sherlock Holmes using Bing on “Elementary.”

As a double-whammy to your subconscious, these same products are often advertised during commercial breaks.

“The idea behind it is branded integration,” Lanzano says. “Either the advertising integrates or the product is actually integrated into the program. Where it’s part of the show, then it works.”

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Of course, “on a practical level if you can’t pay off your debt at the end of the month, you probably shouldn’t be spending,” McCall says.

Running up credit card bills you can’t afford can lead to some serious financial woes and negatively affect your credit score. A first missed payment, for instance, can cause a drop of 70 to 90 points, depending on your current score. A credit utilization rate — how much credit you are using versus how much, in total, has been extended to you — over 30 percent can also be detrimental to your score and subsequently make it harder to secure a loan.

To preclude these and other problems, take steps to reign in impulse shopping.

“Give yourself 24 hours or 48 hours,” Ingram says, before purchasing a product you saw advertised on TV or during your favorite program.

If you’re prone to overspending, you could also keep a journal of all your purchases. This will help you “understand where you money is actually going and then you may be less likely to use your credit card,” McCall says.

It’s also important to remember that “more stuff” isn’t necessarily going to make you happy.

“If you have 15 pairs of shoes … is the 16th pair really going to make that big a difference in your life?” Norton says. If you ask yourself this type of question before making a purchase, “you might think about doing something else with the money instead,” he says.

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