Store Credit Cards Charge More
Many retailers ask each person at the checkout line if they’d like to apply for their store brand credit card- and they even make it seem like a good deal. For example, you might save 10% off today’s purchase if you use your new store credit card to pay for it!
What you have to remember is that the average retail credit card is charging over 20% interest- or aroudn 8-10% higher than bank issued credit cards. If you typically carry a balance on your credit card from one month to the next instead of paying it off in full; saving 10% on today’s purchase is going to end up costing you far more on the retailer credit card than it would on a regular bank credit card.
If you are someone who religiously pays off credit card balances in full every month; you may be ok with using a retailer’s card in order to take advantage of the discount. If the discount is only for one day’s purchase, however, it may still not be reasonable to sign up for a new credit card just for a one-time discount. You’ll have a new line of credit on your credit report, which can sometimes lower your score.
Weigh your options carefully before deciding to get a retail credit card. More often than not, you’d be better off to use a bank-issued credit card instead.
Joe said,
March 28, 2008 @ 12:13 pm
That was I have , I have purchase a dress in JC penny in New York, and i have 15% off after I recieve my first bill I was in shock! that 15% make me 24% more in intrest! it just a “marketing”
MoneyCastle.com said,
March 28, 2008 @ 12:22 pm
One more thing is that it take me to payoff 2 years my credit card because I only pay off a minimum with was about 20 dollars per month and 10 dollars in intrest!