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BUSINESS Friday 18 February 2022
How to protect your spending power from inflation

By HAL M. BUNDRICK of holds a doctorate in eco-
NerdWallet nomics from the Massachu-
Inflation — the rise in con- setts Institute of Technology
sumer prices — is a slow and has become an avid
erosion of your money over proponent of I bonds.
time. Before 2021, the Unit- I bonds rates are keyed to
ed States hadn’t seen an- the rate of inflation, which
nual core inflation much lately has been over 7%, he
above 3% for the better notes. They are a perfect
part of 25 years, says Mi- safe haven for near-term
chael Ashton, managing savings. And not a bad
principal of Enduring Invest- addition to your long-term
ments, a consulting and nest egg, too.
investing firm in Morristown, A minimum investment i n
New Jersey. I bonds through Treasury-
So the 7.5% spike seen over Direct.com is only $25, and
the past year in the costs an individual can put up
of fuel, used vehicles, gro- to $10,000 annually into
ceries and just about ev- the savings bonds with
erything else is the kind of In this Tuesday, June 15, 2021 photograph, beef is displayed in the meat department at Lambert’s electronic purchases. The
sudden and systemic rise Rainbow Market, in Westwood, Mass. bonds pay fixed interest
that can give a jolt to most Associated Press plus the inflation rate, ad-
peoples’ everyday spend- goes directly to your per- personal experience – it’s tions that pay higher inter- justed twice per year.
ing. sonal bottom line. amazing how easy this is,” est rates than you are earn- You can withdraw your sav-
Ashton also says that the Don’t delay a major pur- Ashton notes. He says that ing now (if you are earn- ings without penalty after
COVID-19 pandemic stimu- chase; prices will likely rise. every time he would call ing anything at all). Online one year, but if you cash
lus checks and tax relief, Shop strategically. Buy his cell phone provider, it banks and credit unions of- them in before five years,
combined with the re- more generic brand prod- would offer him a plan that ten offer high-yield savings you’ll lose the last three
opening of the economy, ucts and prescriptions. was far better than his cur- accounts that sweeten re- months’ worth of interest.
fed consumer demand but Save on necessary ex- rent one. “And it doesn’t turns, especially as interest “So what you get is essen-
didn’t replace product in- penses by using coupons happen unless you call,” rates rise. tially a savings account
ventories. The result: short- and store loyalty programs. Ashton adds. Perhaps the most powerful that can’t go down, and
ages that lead to higher Use membership cards (like He now makes a habit of idea of all: Ask for a raise. that’s going to go up with
prices. Walmart+ and others) to calling once a year and If you haven’t received an inflation,” Bodie adds. “Do I
“Having supply chain diffi- pay 5 cents less per gallon asking, “What’s the best increase in salary in a few need to say more?”
culties is part of what infla- for gasoline. plan you have and should years, you’ve likely experi- INFLATION IS NOT THE SAME
tion looks like,” Ashton says. LOOK FOR SAVINGS I be on that?” enced what amounts to a FOR EVERYONE
With inflation chipping Eliminate any fees you pay Reduce the number of sub- pay cut because of infla- Inflation hit a 7.5% national
away at your spending for credit cards or bank ac- scriptions you have, even if tion, Ashton says. average in January, but
power, how can you pro- counts (late fees, monthly by just one. THE INFLATION-MATCHING that’s not likely to be your
tect yourself? or annual service fees, ATM “You should do an audit SAVINGS ACCOUNT inflation rate, says Ashton.
EXAMINE YOUR SPENDING fees, etc.). Many banks of those from time to time Another inflation-fighting You may consume differ-
Trim discretionary spend- are waiving such fees and because sometimes they idea: Series I savings bonds. ent items than the average
ing, voluntary spending in credit cards often have sneak in a price increase, They were created specifi- person and you may not
categories like entertain- fee-free options. and it just shows up on your cally to protect consumers’ live in an average place, so
ment or travel, by just 5%. Renegotiate your cable, credit card,” Ashton says. purchasing power against your particular rate of infla-
This is one of those incre- streaming or cell phone bill TRY TO BRING MORE MON- inflation, says Zvi Bodie, pro- tion quite likely varies from
mental changes that isn’t for any possible savings. EY IN fessor emeritus in finance the average, according to
that difficult to do and “I can say from my own Search for financial institu- at Boston University. Bodie Ashton. q

Visa, Amazon announce worldwide payment agreement

NEW YORK (AP) — Visa Inc. Last year, Amazon started ing the two sides were talk-
and Amazon.com Inc. an- charging customers in Aus- ing.
nounced an agreement tralia and Singapore who Amazon had announced
Thursday that allows cus- use Visa credit cards a 0.5% the move in November,
tomers to use Visa cards surcharge. blaming “the high fees
on Amazon sites worldwide Under the agreement, Am- Visa charges for processing
without additional fees. azon’s amazon.co.uk site in credit card transactions.”
The companies also agreed Britain will no longer turn off Any credit card transaction
to collaborate on product Visa credit cards. Custom- involves various fees, such
and technology initiatives ers in Australia and Singa- as an “interchange fee”
for “innovative payment pore will no longer pay the that the shopper’s bank
experiences,” Visa said in surcharge for using Visa. pays to the retailer’s bank
an email. Last month, Amazon’s Brit- and other costs like service
Credit card fees have ish website backed away and technology charges.
been a growing source of from plans to stop accept- It wasn’t clear which fee The logo for Amazon.com Inc. is displayed on a screen at the
tension between Amazon ing Visa credit cards issued was the focus of the U.K. Nasdaq MarketSite, July 27, 2018.
and Visa. in the United Kingdom, say- dispute.q Associated Press