Store Brand Credit Card Incentives - Not Always What They"re Cracked Up to Be
Credit card offers are practically falling out of the sky these days.
You can hardly go out in public anymore without seeing credit cards promoted by many of the places you may shop at.
Many businesses now offer their own uniquely branded credit cards that can be used for many different types of purchases.
Shop at any Target store and a sales associate will offer you a Target Card along with a 10 percent discount on your purchase if you sign up.
Go to a gas station and you may see an ad for a gas card offering reduced rates on your gas purchases.
The list of places offering their own cards and associated deals goes on and on.
Store brand credit cards often offer a number of incentives that may make using them worthwhile on certain occasions.
Many department store credit cards provide some excellent perks - store discounts on select occasions, gifts certificates, cash back bonuses, free gifts and more.
If you're spending $250 on Christmas gifts at Target a 10 percent discount might sound like a very good deal.
The perks many store branded credit cards may offer aren't always all they're cracked up to be, however.
Always read the fine print attached to any offer.
You may find out that in order to get a discount you have to spend more money than you were anticipating.
Many store branded cards also have interest rates well above the rates you would expect from most major credit cards.
Some of these cards have interest rates above 20 percent, which is often what you would expect if you had bad credit.
Fail to pay off your balance before the grace period ends and any discount you may have earned in store will be eaten away very quickly.
Some stores and select manufacturers may offer cards with deferred interest on purchases for a set period of time.
If you don't think you'll be able to pay off the balance before the deferred interest period ends, don't make the purchase or it could cost you! For example, Mitsubishi offers a credit card with a $5,000 credit line with two years of deferred interest on any qualifying purchase.
Buy a $2,500 HDTV and fail to pay it off within two years and you could get slammed with a lump sum charge equal to the full monthly interest on the purchase price multiplied by 24 months.
The price of your HDTV could more than double once the deferred interest period is over and your new required minimum monthly payment could become astronomical.
In addition to the very high interest you may end up paying, signing up for a lot of credit cards could look bad on your credit report.
Apply for too many lines of credit and your credit score could go down.
Get close to maxing out any of these cards with low credit limits and you could see your credit score go down even further.
The best cards many businesses may offer will likely be co-branded cards sporting the Visa, MasterCard, American Express or Discover logos.
Your interest rate will likely be lower on these cards and you won't be limited in where you can use them.
You may also qualify for all of the related perks offered by the store where you signed up for the card.
The next time a pushy sales associate tries to get you to sign up for a store credit card be ready to ask a lot of questions.
If you aren't aware of all the advantages and potential disadvantages associated with using the card when you sign up, it could cost you.
You can hardly go out in public anymore without seeing credit cards promoted by many of the places you may shop at.
Many businesses now offer their own uniquely branded credit cards that can be used for many different types of purchases.
Shop at any Target store and a sales associate will offer you a Target Card along with a 10 percent discount on your purchase if you sign up.
Go to a gas station and you may see an ad for a gas card offering reduced rates on your gas purchases.
The list of places offering their own cards and associated deals goes on and on.
Store brand credit cards often offer a number of incentives that may make using them worthwhile on certain occasions.
Many department store credit cards provide some excellent perks - store discounts on select occasions, gifts certificates, cash back bonuses, free gifts and more.
If you're spending $250 on Christmas gifts at Target a 10 percent discount might sound like a very good deal.
The perks many store branded credit cards may offer aren't always all they're cracked up to be, however.
Always read the fine print attached to any offer.
You may find out that in order to get a discount you have to spend more money than you were anticipating.
Many store branded cards also have interest rates well above the rates you would expect from most major credit cards.
Some of these cards have interest rates above 20 percent, which is often what you would expect if you had bad credit.
Fail to pay off your balance before the grace period ends and any discount you may have earned in store will be eaten away very quickly.
Some stores and select manufacturers may offer cards with deferred interest on purchases for a set period of time.
If you don't think you'll be able to pay off the balance before the deferred interest period ends, don't make the purchase or it could cost you! For example, Mitsubishi offers a credit card with a $5,000 credit line with two years of deferred interest on any qualifying purchase.
Buy a $2,500 HDTV and fail to pay it off within two years and you could get slammed with a lump sum charge equal to the full monthly interest on the purchase price multiplied by 24 months.
The price of your HDTV could more than double once the deferred interest period is over and your new required minimum monthly payment could become astronomical.
In addition to the very high interest you may end up paying, signing up for a lot of credit cards could look bad on your credit report.
Apply for too many lines of credit and your credit score could go down.
Get close to maxing out any of these cards with low credit limits and you could see your credit score go down even further.
The best cards many businesses may offer will likely be co-branded cards sporting the Visa, MasterCard, American Express or Discover logos.
Your interest rate will likely be lower on these cards and you won't be limited in where you can use them.
You may also qualify for all of the related perks offered by the store where you signed up for the card.
The next time a pushy sales associate tries to get you to sign up for a store credit card be ready to ask a lot of questions.
If you aren't aware of all the advantages and potential disadvantages associated with using the card when you sign up, it could cost you.
