You should probably stay away from that store credit card
Rewards, especially in this state of consumerism, are awfully tempting.
We mean rewards as in, 10-to-20 per cent off a purchase-type incentives. The good kind.
One easy way to get those? Sign up for a store credit card, be it at Home Depot, Sears, The Bay or wherever.
Heck, why not? Not only are you making yourself eligible for a nice discount on your initial card purchases, but you’re only working your way to more store points if you shop often in one spot.
And, if you’ve got a bit of trouble with Visa or MasterCard, here you’ve got a friend. Store credit cards are often much easier to qualify for, no matter what your financial history.
So are there any downsides?
Consumer Reports has detailed why shoppers should stay away from store credit cards, and their reasons are tough to argue.
The obvious: store credit card interest rates can be ludicrously high, up to 24.5 per cent in some cases. Compare this to the average 12.81 per cent rate for normal cards, and you’re taking a much bigger gamble if you can’t come up with the cash at month’s end.
“If you miss a payment, any savings you get for opening a store card could quickly evaporate at such high interest rates,” Consumer Reports warns.
Your credit score can also take a hit if you open too many cards at once, which – once the intoxication of saving kicks in – you might be prone to do.
Most importantly, though, you might feel a kind of warped loyalty to the store you’ve signed up for a card from. Consumer Reports suggests a rewards program is likely to entice you to spend more than normal to take advantage of any discounts you’d get (all the while neglecting to shop around for the best price.)
“Before you sign up for any credit offer, you should read and understand all the terms and conditions of the account,” the site concludes, “Something you might not be inclined to do with a long line of shoppers waiting impatiently behind you.”
By Jason Buckland, MSN Money
Posted by: E. Anderson | Nov 26, 2021 1:26:16 PM
Not to speak of the negative impact it has on your credit rating, even if you do not use it.
Posted by: anesley | Nov 26, 2021 2:46:14 PM
That is very true, but if you can make you full payment why not have one and enjoy the benefits, one one can help unless you make your own plans and schedule. so keep in mind keep track what you spend and where you spend and analyze
Posted by: kkanova | Nov 26, 2021 4:43:52 PM
Do not agree. For years now we use only 2 credit cards - Canadian Tire and President's Choice. Both are giving us points to shop in the stores equal to 1% of the spendings, but the trick is you have to pay your credit cards in full and on time. So you have to be very organized. Then they also send you very good promotion rates.
Posted by: Edward | Nov 26, 2021 4:54:18 PM
The store credit card, has just added a new twist to gouge, the unsuspecting consumer:
Recently at HBC,the Casheir asked "Would like a cash back of $60.00?"
How many realize, that unlike your debit card, it is a cash advance, against your credit card,
interest payable from day one (no grace period)...
Just another thing to keep in mind......
Posted by: Lulu | Nov 26, 2021 8:28:02 PM
Zeller cashier asked "would you like cash back?" which sounded like the HBC Rewards cash off your purchase. It was actually a cash advance on the HBC credit card.......I told her I did not want cash advance and had the supervisor redo the bill. I advised I had no intention of paying any interest to which the cashier replied well it would only be a small amount.......DUH!!! I contacted HBC credit department to state that I was not happy about this type of gouging and I would cancel my card if the policy was not corrected. I was advised that the cashiers are NOT to ask (if you want cash back which is really a cash advance than you may request it) and took the particulars for which store. As consumers we need to be more vigilant and express our opinions to the head office.
Posted by: Ros | Jun 5, 2021 4:51:41 PM
I also got the "cash back" question from cashier at Zellers recently, who told me it was cash instead of HBC Rewards points, or something like that. Not true, apparently! Anyway, if one does not like the items in the HBC Rewards catalogue, one can just use accumulated points to order a gift certificate for oneself. That's as good as cash.
My advice is not to say yes to anything on the spur of the moment. Check it out well beforehand, and read the fine print.
I like my store credit cards! I save money with them. I never pay interest. It's not hard to do!