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[D178]Department Store Credit Cards

by Roy Thomsitt, Roy

Now that we are heading at breakneck speed to the peak retail season (ie Christmas), you will soon, if you are not already, be wondering what to do about all those gifts and other expenses that need to be catered for in the holiday season. November and December are months not only of major expense, but also of major temptation; such as department stores and department store credit cards.

Many of those temptations will be glaring at you in the local department store. The Christmas decorations, the wonderful foods, the specially wrapped sweets and chocolates, the fashions for the Christmas parties, the jewellery and perfume to impress your girlfriend. Increasingly over the next few months you will be surrounded in the department store by people hurriedly stuffing their shopping baskets with all things Christmassy; frantically spending as if there were no tomorrow. Well, maybe there is no tomorrow, I am not privileged to know; but let's assume there is a tomorrow, and lots more, and then it's Christmas Day.

Spending can be contagious. Can be? It is! People go silly in the run up to Christmas. The sad thing is, many of those who do go silly cannot afford it; the shopping binge becomes a credit binge, which leads to a miserable New Year. The department store is like a magnet for this seasonal silliness; whether you are from the North Pole or South Pole, or anywhere in between, the magnetic attraction is there.

One thing you can be sure of is that department stores will be doing all they can to grab your cash in the next few months, whether you have any or not. You have no savings, no cash to spare? Then the department store credit card will be brandished temptingly in every nook and cranny of the store. With all the dazzle, the sparkle, and frenetic buying of a glitzy Christmas going on around you, those easy department store credit cards could be like an oasis in the desert. Money, money, money to spend, spend and spend.

Tempted? Department store credit cards do have their place, but not necessarily in your wallet. Interest rates can be high, so watch out for that if you feel yourself being sucked into their trap. But they're offering interest free credit, I hear you shout? But for how long? Ever? I doubt it. Can you really afford to pay back within the free credit period? There could be a sting in the tail of that credit card from your local department store. So check the offers properly, and the fine print before you sign.

It is much easier than getting a regular credit card, and you are allowed credit that you normally may not have qualified for. Still, is it really worth it?

Should you really get a department store card, or would it be better if you just used a regular credit card? Here are a few pros and cons of having a credit card designed for a specific store.

Disadvantages

High Credit limits

Having several department store cards with limits that you think are not very high can actually add up to be quite a bit. Having even small amounts on your department store credit limits becomes one large limit, which can make it difficult to get a major credit card. Having such a high credit
limit because of your combined department store cards ties up your credit line and only allows you a small amount in which you can add another credit card.

No Rewards

Department store credit cards are more dangerous than they are useful when they do not give you something back for what you buy. Just being able to buy it on credit is not worth it, and can get you into financial trouble that you do not need.

Get a card that allows you to save money on the products that you buy, and keep only those cards. Once you pay them off, don't keep them. Having these cards will tie up your credit line and make other cards difficult to acquire.

High Interest Rates

Some department store cards have high interest rates that end up costing you more than you bargained for. Sometimes even the rewards do not make up for the money you spend on interest just to get these cards. Making late payments on these will also allow department stores to shoot your rates sky high, so you have to pay on time, or the card will be more of a burden than an advantage.

Advantages

Free Stuff

Some department stores allow you to receive free amenities when you use your card to buy things online or from a magazine. Services such as shipping and handling and/or free gifts sometimes come with your purchases when you buy an item from a store with its credit card. This can be bought on the internet, over the phone, and through magazines, all being delivered by mail to your home.

Rewards

Buying things from a department store using the card specifically designed to use at those particular stores can sometimes save you money. Depending on the department store, you may be able to get a certain percentage, or a certain amount of money back for a certain amount that you spend on a purchase. In this aspect, it is much like a rewards card, though it is only limited to purchases and savings within that particular department store.

Article Source : Disadvantages Of Credit Cards

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