Beware of signing up for Department Store Credit Cards
Something you should know about credit cards: Have you been bombarded lately by stores offering you 10% off a first time purchase just for opening up a credit card with their store? This happens a lot and the stores have great success in getting credit card customers this way.
Opening a line of credit should not be an impulse decision and should not be done while checking out at a department store. In fact, their card may have some funky terms and conditions.
Make Sure the Credit Card You Sign Up For Has The Best Bonuses And Rewards
For starters, you may not be getting the best sign-up bonus that is available. As stated before, you might be signing up for an in-store credit card being offered 10 percent off your purchases that day but is that really the best credit card deal on the market?
People have been offered in-store credit with 10 percent off their purchases (some may be under $100). This is not such a hot deal by today’s credit card standards. If you researched other competing offers available at the time, you will probably find many great sign-up bonuses being offered by other cards. You can’t just apply for every credit card in the universe and you should only pick the ones that give you the best rewards and sign up bonuses.
Choosing A Credit Card Is A Long Term Financial Decision
Why would you want store credit cards anyway? It would be virtually impossible to have a credit card for every store that you visit and please don’t tell me that is the case for you (unless you only shop at three stores). When you choose a credit card, you are not just making a decision to carry a piece of plastic but you are making a huge financial decision. Your selection of a credit card should be the one with the lowest interest rates and the smallest fees ($0 fees being the best) as well as the best rewards. Having a department store credit card may make you think you are part of some kind of special club and you are right. That could mean that you are a member of the SUCKER club that fell for bad rates and limits on purchases. I hate to put it so bluntly but that is just the simple truth. Just to let you know, I have been one of the suckers in the past as well. So I speak from experience.
The Pitfalls Of A Store Credit Card
Using store credit cards could actually limit you from comparison-shopping. Department store credit cards are often times nudging customers to come back to their store by offering certain rewards. This sometimes blinds customers and therefore they may be unaware of better prices at competing stores. This is a great trick by a lot of retailers used when getting you to use their credit cards.
In-store credit cards usually do not have the best terms and conditions. Most people intend to pay their balances off in full every month, but many do not. When I say many, I mean many because the vast majority will carry a balance forward to the next month. Department store credit cards are not well known for their low fees or great rates and they often change their terms and conditions leaving you out in the cold. Now does that 10% off sound so great? That’s just a few of the many reasons why a person should shop around for the best credit card for them. It pays dividends in the long run.
Are There Times To Sign Up For Store Credit Cards?
There are plenty of reasons to not sign up for store credit cards, however there may be some circumstances in which they make sense. These are few and far between. If you find yourself in a situation where you see that it is more beneficial to use a department store style of credit card, then by all means do it but make sure you have done your homework. Make sure you are getting something of great value where it save you money in some case.
All in all, the theory of Plastic Dollars is pretty much the same as the well known radio show host Clark Howard. There is a lot more downside to using a store credit card in the long run and signing up for one should only be done sparingly. It is the opinion of this website to always pay off your credit card bills in full each month and literally reap the rewards of the credit card companies. So beware of signing up for these department store credit cards.
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