Will Supply Chain Problems Hit Your Wallet During Holiday Shopping?
by Maurie Backman | Published on Oct. 31, 2021
Shoppers may need to brace for higher holiday expenses.
There's a reason consumers are being advised to shop early for the holidays this year. Supply chain issues are putting a lot of retailers at risk of being short on inventory. If you want to make sure you'll be able to snag all of the items on your loved ones' wish lists, you'll want to give yourself a head start.
But supply chain issues aren't just threatening product availability. They're also making some products more expensive. And that's something you'll need to prepare for.
Why the backlog?
A number of key supply chains overseas have seen their share of disruptions over the past several months. Flooding issues in Asia during the summer caused many shipments to get held up, while many factories had to shutter temporarily due to COVID-19 outbreaks.
Additionally, the U.S. is seeing its distribution network get hammered. Some of the country's biggest ports have increased their hours to get stalled container ships unloaded more quickly. Perhaps an even bigger issue is a shortage of truck drivers to deliver goods within the U.S. Though ports are ramping up to move products onshore, that does little good if those items can't be transported to their ultimate destinations.
Due to these problems, many retailers are spending more money to produce and distribute goods in time for the holiday season. And some, in turn, are passing those higher costs on to consumers. It's for this reason that a lot of your holiday purchases could cost more this year than you'd expect them to -- even if you attempt to take advantage of major shopping days like Black Friday to eke out some savings.
How to tackle higher prices amid supply shortages
The last thing you want to do is close out the upcoming holiday season with a pile of debt. To avoid that, you may want to consider getting a side job if your regular paycheck can't keep up with the rising cost of holiday goods.
Many businesses need extra help during the holidays, especially this year, when labor shortages have abounded. It could end up being pretty easy to pick up some shifts at a local store to pad your bank account and cover your holiday expenses with ease.
At the same time, be strategic about the credit cards you use for your holiday shopping. If you expect to spend a lot of money in a short period of time, it could pay to apply for a new credit card that offers a sign-up bonus. That extra cash could help pay for some of your gifts and other expenses.
Say you qualify for an offer that gives you $200 cash back for spending $1,000 within three months of opening a given card. If you expect to spend $1,000 on the holidays, you might as well sign up. That way, your $1,000 in purchases will really only end up costing you $800.
Unfortunately, supply chain issues could make holiday shopping less pleasant and more challenging this year. Prepare to pay up for certain buys, but also, get moving on those purchases ahead of time. The good news is that a lot of retailers are running Black-Friday-like deals ahead of the main event, so doing your shopping early won't necessarily mean losing out on discounts.
Alert: highest cash back card we've seen now has 0% intro APR until 2024
If you're using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.