The Truth About Retail Cards
Some Very Nice Benefits
Retail credit cards are available for a wide range of stores across the world, for everything from fashion to video games to home improvement items. They offer unique rewards in a multitude of formats along with ease of convenience at specific stores. This can be an excellent choice for you if you regularly shop at any given store anyway, allowing you to not only partner up with other store offers and benefits but also to rack up points or discounts.
While there are some caveats to store cards, they can be best for you if you feel you can make full payments to cover the full balance. By charging your purpose even when you can pay cash, you can earn points that would not otherwise be available. These points could be redeemable for future purchase. It’ll allow you entrance into a special “store only” club as well.
Join The Club!
Stores are apt to offer retail credit cards, realizing this will encourage you to keep coming back for more. It also means that they’ll get your address and statistical information for their records, which can go towards their customer research and allow them to let you in on deals and promotions. This can be a win-win situation.
For example, you might get a free store catalogue or a regular flyer whenever there’s a sale. You will also be the first to know when there is a sale event coming, and there are often even previews before the general public has access to these sales. When you are able to use member points or coupons you’ve collected on a special sale you’ve significantly increased your savings.
Other benefits to retail cards are when you are automatically entered into prize draws or competitions. Before you know it you could be winning the latest and greatest new product, just by being a member.
Some stores will also offer members only events including customer appreciation nights and double and triple points with use of your credit card. You may qualify for Christmas gift vouchers or free gift cards, along with a free gift with purchase during the holiday season, or easy gift guides to make Christmas shopping a snap. Finally you are often able to make large purchases at a 0% interest rate for a specified period of time. This allows you to buy an extra sofa bed when family unexpectedly shows up at Christmas, without worrying that you’ll be buried in interest when your mother in law goes home. When the dishwasher tanks just before your big Thanksgiving dinner, use your retail card to get a replacement and rack up points rather than loading up on paper plates or recruiting cousins to wash your dishes.
Finally, while just starting out retail cards are often easier to obtain. While they offer great incentives such as you might expect on rewards cards, they don’t usually have the steep minimum credit amounts or income requirements. The trick is to use them responsibly while enjoying the benefits.
Don’t Make This Mistake!
While retail cards have a multitude of benefits, as with everything in life, there are some important pitfalls you can avoid with careful consideration.
The first thing to consider while selecting and using a retail card is the interest rate. Typically interest rates on retail cards can be much higher on their regular counterparts. Interest rates of 21% to 25% will be the norm, so when considering a retail card you will want to be sure you can pay off the full balance each month. Again this allows you to gain the benefits of using the store card without having to lose money to interest.
Even when a 0% term rate is offered for purchases this may be waived by the company when a minimum payment is missed or late. Furthermore, that interest rate of 21% may even skyrocket to 27% if you accidentally miss your payment, so consider setting up an automatic payment or at least a reminder so you won’t negate the benefits of store cards. Finally, when you do take advantage of the 0% rate for a purchase you will want to make payments greater than the minimum required. Paying only the minimum is likely to ensure that you will be paying that purchase off still when interest does come into effect. Still, if you plan carefully you can avoid this problem, and in an emergency in-law situation it may well be worth it.
Some store credit cards may only be restricted to use with that store, while others may be used elsewhere but will not rack up points in other stores. You may also be required to pay an “establishment fee” when you first register for a store card, as your membership details are entered and you join the club.
That said if you are able to shop regularly at a store the membership benefits will certainly add up. You can enjoy premium treatment without hassle if you do some planning in advance and keep your card in check.
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