Q: My best friend and I have a bet going this year on who can get the best deal for a 50-inch, flat-screen TV. I bet him a large coffee that I could get my TV cheapest in the U.S., and he thinks that he'll get a better deal in Canada. Who's going to come out holding the cards?
A: I'm glad to hear that you are only betting a coffee given the money you both will spend on new TVs! There are a few things to consider when you're thinking about making a purchase such as this south of the border:
The exchange rate
At this point, it's quite good. However, make sure that it's close to par to make it worth your while. Also consider the extra fees if you use your debit or credit card in the U.S.
The cost of duty
If you are making a large purchase, know what the rules are for bringing goods back into Canada. Factor in the cost of accommodation, food and transportation into your purchase price. Don't forget that you are only allowed to bring back $400 per person after 48 hours. If you are there for a shorter period of time you will be required to pay taxes and depending on where the TV is manufactured, duty as well.
Warranties and exchanges
If you have any challenges with your TV purchased in the U.S. and you wish to return or exchange it, you will need to make another trip south. Factory warranties often don't apply in Canada.
Mounting hardware and additional cables
It would be a shame not to be able to use it!
Regardless of where you buy your new TV, if you pay for it using a credit card, consider how long it will take you to pay it off. Factor in the additional interest costs and fees into your purchase price. Keep in mind that not paying it off right away can add as much as 50 per cent to the purchase price.
After taking into account all of the costs of buying a new TV, winning this bet only matters if the cards you're holding aren't debt-laden credit cards.
If they are, you'll be much better off financially enjoying a coffee while watching TV on a smaller screen.