Pros & Cons of Department Store Credit Cards
Who doesn’t love food, electronic gizmos, adorable pets, comfortable couches, and oh, did I mention food? Well luckily we can find all of those items and even more at nearby retail or department stores. No matter who you are? If your eyes gaze upon something which becomes your heart’s desire, you would want it at any cost right? Well, here are a few pointers of some considerations and implementations you may want to know before you leave home.
Do not Have too many
Do not keep many cards with you. There is no point in applying for every card possible. Keep a limitation of at least two cards. These cards are good to help you start off on a good credit.
Do not keep your Balance Under 20%
Keep your card in limited credit. Let’s say you have about $200 in your card as your limit, spend roughly around $50, the more you shop the more debt you will be in, the harder it will be to pay it off.
Rewards are not everything
Often, people tend to use their cards to the fullest thinking that the rewards on the other end are like a pot of gold. Well, sorry to burst your bubble but that is not true. As a matter of fact, you can actually save more than what rewards have to offer. The question is, how tempted can you get?
Make all Payments on Time
Make sure you make all of your payments on time. Think of the card as an actual credit card. You have to pay all of your dues on time, or else you will be charged with fines and penalties.
Make all Payments in full
Do not spend more than you can afford. Eventually you have to pay the store back. Once you do, make sure you make the entire payment at once. Leaving some balance each time will only make them pile up more & more, making them difficult to pay off.
Low Credit limitations
Department store cards usually have low credit limitations. You will have to plan what you want to buy with the card accordingly. Suppose your limit is $200. Now it’s up to you how you can utilize this amount, keeping in mind you eventually have to pay back.
Up, Up, and Away
Department stores and retail stores have high interest rates. This rate varies from 30%-40% depending on the store. On top of that, if you do not pay what you owe by the due date, you will be heavily fined for it. Even if the store gives you a 10% discount, it is still your loss, right?
Limited Usage of Your Card
You can only use a certain type of card at a certain store. Each store has its own policies, its own rates, own criteria, depending on which store you prefer more, the card you receive will limit your benefits only till that particular store.
Knock, Knock, Who is there? Debt!
Often, these store cards can lead to debts; they can cause temptations which can put you in a whole lot of trouble. Be afraid, be very afraid.
Hidden Terms & Sneaky Conditions
This can be a serious problem, stores do not highlight terms and conditions, so you can not avail the card in every way you want to. Rules must be followed. Wait, what are they?
Now you know the pros and cons to department store credit cards, let us know how your experience has been.