Wednesday, March 14, 2007

Store Credit Cards

Store cards for me are a discount tool. They get a bad rap because the APR tends to hover around 22%. Honestly, I think the APRs on my store credit cards are around the average but I have no clue what the exact number is, why? I use my store credit cards as discount tools.

JC Penny - extra 15% when I shop certain days. I am going into the store to buy a specific item which I already have the cash to pay for. However, since it is 15% cheaper to use the JC Penny card I will make the purchase using the card, then pay the card off before the bill arrives in the mail.

PC Richards - This card I got back in college since I wanted a TV but had no money to pay for it. They normally offer no interest for 12 months. Why not? I always end up paying for any item bought within two to three months. I do not use this card often since I am not buying that much in terms of electronic gadgets.

Old Navy - This card I have had for a few years. Each time you spend $200 you get ten bucks back to use off your next purchase. It normally takes a while for me to accumulate $200 in purchases since I do not buy a lot of clothes. When I do shop for clothes they have to be on clearance 50% off or more. The ten bucks back I normally use to purchase something that is ten dollars only. Again I pay no interest on this card.

Victoria Secrets - I use this card probably a few times a year. Mostly I only make it to purchase stuff during the semi-annual sales. I load up on a few items during the sale then the card gathers dust for a few months. There are times when I do not catch the sales, therefore the card is unused for almost a year.


Melissa said...

I agree... I use them for discounts too... like Banana Republic offers free shipping, I can get the same discounts at Old Navy and Gap as their card holders, I get alerted first of sales and I get the rewards. I pay off everything 100% immediately though, those interest rates are pretty bad! My cards are all locked up till I need clothes again though so no urge to use them!

Single Ma said...

I get store discounts by signing up for their newsletters via email or giving them my phone number when I make a purchase. Too many store cards are bad for your credit score. Nothing to do with interest rates. They just have lower limits, higher util % when a balance is reported (doesn't matter if paid off before bill arrives), viewed as a charge card vs. a revolving line of credit, etc. It's better to have a healthy mix of 'real' credit cards (i.e. visa, mc, amex) with higher limits for maximum FICO effect.

Tired of being broke said...

Melissa I true about not using the card till next time to shop.

Single Ma so far the store cards have not had a negative effect on my credit. I have a visa, a MC and an Amex, with the credit score staying above 700.

Bklyn Diva said...

I don't own any store cards.. I used to back in the day but not anymore.. I'm credit card free :) but that can also be a bad thing but I digress.. Like single ma.. I sign up using the newsletter emails and I get the same discounts as those with cards :)

CreditThinker said...

If everybody used credit cards as sagely as you did, all credit cards issuers would bankrupt :) As for me, I don't own any credit card. I think, I couldn't control expenses had I a credit card.

susankellogg said...

I agree that one can save a lot using store credit cards when use them properly. The same can be said about credit cards with rewards. I am sure, only those who know when and where to use them can benefit from these cards and not overspend. I see, you can do it.