Saving $$ With Department Store Credit Cards
We all know how department store credit cards charge the highest rates of interest, but they also give the biggest rewards. For large purchases at a department store - a leather jacket, a new bed, refrigerator, diamond earrings or patio set, for example, a 5% or 10% discount you may receive from using your department store credit card is 5 to 10 times higher than with a general retail rewards credit card that earns you one point per dollar spent, with limited redemption options.
If you don’t have a department store card for the particular place you are making your purchase, don’t worry, the salesperson will be more than happy to sign you up. Plus you’ll enjoy future discounts. However, to avoid getting caught in the high interest snare, make sure you pay up each month. Most department stores will not let you pay your account balances with other credit cards, and if you take a cash advance from another credit card, you may begin to pay interest right away. However, if the cash advance interest rate is 19% and the credit card from the department store is 30%, you’re still ahead of the game. Plus, you have 21-or-so days of a grace period with the department store payment depending on the terms and conditions of your card.
Another benefit is you will increase your available credit on your credit report. If you don’t use your department store card often, your overall debt-to-credit ratio will improve, simply by adding more available credit.
