The ads are nearly inescapable. They beckon to us from everywhere; telling us that we can buy with no money down ad accruing no interest for as long as three years!
However, are these retailers' credit cards really the deal they seem to be? Let's take a look at what happens when you take on a credit card from a retailer.
While these credit cards really do let you buy with no money down, offer a 0% interest rate and let you avoid making payments for the first couple of years. This offer is usually limited to a specific purchase, however. Lets' say that you apply for one of these retailers' credit cards at a furniture store. They may offer a discount of 15% off of the purchase price for signing up, offer no payments for two years and a 0% interest rate for this introductory period.
This is a great deal, with one caveat. If you don't completely pay off this retailer's credit card within those two years, you'll be charged interest on the purchase ? not just from the day that this no payments period runs out, but retroactively. The interest will probably also be compounded every thirty days over that two years; this can really add up.
These cards should be approached with caution. If you cannot pay off the balance in full before the end of the introductory period, then you are probably better off without this card. Those retroactive interest charges could add up to quite a lot of money. Remember that these retailer's credit cards often have much higher interest rates than a regular MasterCard of Visa would.
If you're not sure that you can pay the entire balance within the introductory period, don't apply for the retailer's credit card. You are much better off not incurring this kind of debt; if possible, pay cash for these large purchases. If you cannot do so, then use a regular credit card instead ? the lower interest rates will end up saving you a lot of money over time. While you may lose out on the discount offered on the purchase price, you'll still be saving money by avoiding these retroactive interest charges.
Now, if you shop at a store regularly and you can easily pay off your balance in full in a timely manner, then these retailer's credit cards can indeed be a good thing. If you are just signing up for these retailer's credit cards in order to receive a discount on a specific purchase, then you may be better off without it. Those retroactive interest charges can come back to haunt you otherwise, so make sure you can afford to repay the balance in full before the end of the introductory period before you sign up for these cards.
Finally, remember that no matter which credit card you use, you're going to end up paying a lot in interest charges if you don't use responsibly. So shop carefully, and pay down your credit card balances as soon as you can; in fact, it's a good rule of thumb to have that you never carry balances on credit cards for more than 30 days. Credit used responsibly can be a good thing, but you have to be careful just two you get it from. - 15224
However, are these retailers' credit cards really the deal they seem to be? Let's take a look at what happens when you take on a credit card from a retailer.
While these credit cards really do let you buy with no money down, offer a 0% interest rate and let you avoid making payments for the first couple of years. This offer is usually limited to a specific purchase, however. Lets' say that you apply for one of these retailers' credit cards at a furniture store. They may offer a discount of 15% off of the purchase price for signing up, offer no payments for two years and a 0% interest rate for this introductory period.
This is a great deal, with one caveat. If you don't completely pay off this retailer's credit card within those two years, you'll be charged interest on the purchase ? not just from the day that this no payments period runs out, but retroactively. The interest will probably also be compounded every thirty days over that two years; this can really add up.
These cards should be approached with caution. If you cannot pay off the balance in full before the end of the introductory period, then you are probably better off without this card. Those retroactive interest charges could add up to quite a lot of money. Remember that these retailer's credit cards often have much higher interest rates than a regular MasterCard of Visa would.
If you're not sure that you can pay the entire balance within the introductory period, don't apply for the retailer's credit card. You are much better off not incurring this kind of debt; if possible, pay cash for these large purchases. If you cannot do so, then use a regular credit card instead ? the lower interest rates will end up saving you a lot of money over time. While you may lose out on the discount offered on the purchase price, you'll still be saving money by avoiding these retroactive interest charges.
Now, if you shop at a store regularly and you can easily pay off your balance in full in a timely manner, then these retailer's credit cards can indeed be a good thing. If you are just signing up for these retailer's credit cards in order to receive a discount on a specific purchase, then you may be better off without it. Those retroactive interest charges can come back to haunt you otherwise, so make sure you can afford to repay the balance in full before the end of the introductory period before you sign up for these cards.
Finally, remember that no matter which credit card you use, you're going to end up paying a lot in interest charges if you don't use responsibly. So shop carefully, and pay down your credit card balances as soon as you can; in fact, it's a good rule of thumb to have that you never carry balances on credit cards for more than 30 days. Credit used responsibly can be a good thing, but you have to be careful just two you get it from. - 15224
About the Author:
Steven J. Talrechi is an expert on credit for over 10 years. He writes about various topics on said field, including application for a credit card, and different credit card offers.
