STORE CREDIT CARDS – RETAIL STORE CREDIT CARDS ARE BOON OR BANE?

Store Credit CardsThese days if a person’s wallet is over filled with credit cards one sure ingredient among the various forms of plastic is a retails store credit card.

Most retailer’s partner with one or more credit card issuers to get their own retail store credit cards and most of them lure their unsuspecting customers into purchasing one or more of these credit cards promising them numerous perks starting from discounts, to cash backs to introductory 0 apr offers.

But it is a totally different story as to whether these offers are there for real and whether the retail credit cards will give you what they promise to.

Why Retail Store Credit Cards?

Have you ever stopped to think why exactly a retail store would want to give you a credit card?

The credit card for them is just another way to make money.

For a start these retail store credit cards are far easier to get than normal credit cards because most retailers would just do a very brief check on your credit scores and if they look more or less ok you are immediately issued a credit card.

Most of the time these credit cards come armed with so many offers most of which you would find too irresistible to resist.

The result being that you end up buying so much out of that credit card that the profit for the retailer is already taken care of.

Retail Store Credit CardsIs that all?

Of course not. The story has just begun.

You feel that if a retail store credit card is so simple to get why not get one from every one of your favorite stores since each store has a whole lot of offers making your shopping seemingly less expensive.

Nobody ever stops to think that if the retailer is offering you a credit card without even so much so asking you a single question then there must be definitely a catch to it somewhere.

And there definitely is.

If you stopped to look over you would be able to find that most of these retail store credit cards charge much higher interests than what most credit card issuers charge from you.

The starting interest rates for most retail credit cards is 25 percent plus which is higher than what most credit card issuers would charge their customers.

Moreover the retail owner is sure to be getting that high interest from you because seeing the attractive stuff that they have on offer most of the customers who fall into the trap of getting the retail credit card in the first place would immediately follow it up with a long list of purchases which comes in tandem with an equally long bill.

Retail Store Credit Cards – Have you gone through the fine print?

Most store owners will also show you the 0 apr tag as well.

You take the credit card thinking that this credit card is just like most other 0 apr credit cards which charges no interest from you till the time the offer expires.

But have you gone through the fine print in detail?

If you have not then you should have because that is where the dark secrets lay hidden.

You would be able to find that the moment you make a late payment or miss out on a payment the 0 apr clause goes for a toss.

Of course this would be indicated in the terms and conditions which you of course did not go through before signing up.

Usually if you have not paid for the purchases you made initially by the time your offer period closes then you will find that the interest is charged on the full amount of the first huge purchase that the retailer prompted you to make indicating a whole lot of perks and not on the remaining balance as is usually the case.

Retail Store Credit Cards – what about my credit score?

Most people are of the wrong notion that the credit score is hardly affected when you take a retail store credit card. This is absolutely not true.

credit card score & Retail Store credit Cards

The retail store credit card that you take is also very much counted as any other type of credit card that you have and will have the same effects on your credit score as any other type of credit card would have.

For your credit score to remain within safe limits it is important that you keep you credit card bills to less than 30 percent of the credit limit which is the rule that applies for a retail store credit card as well.

A retail store credit card can also adversely affect your credit score if you have taken the credit card just to take advantage of an offer and close the credit card almost as soon as the credit card offer closes.

A retail credit card is just like any other type of credit card and has to be used with just the same amount or even a bit more prudence.

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Posted by Herschel on Feb 17 2011. Filed under 0% Apr credit Cards, Business Credit Cards, Featured News • Credit Card . You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.