Everywhere you go, we see ads screaming at us to take on this credit card or that credit card. The ads scream at us, "0% down, no interest for 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.

That's great, if you can swing it. However, there's a caveat. If you don't pay off that credit card balance IN FULL within the time the store gives you to pay off the balance (let's say, two years), you might think that you're going to be charged interest beginning the first day after the end of that introductory period, but that's usually not true. In fact, you're also likely going to be charged interest retroactively to the day of the purchase, and it may also very well be compounded during those months, usually every 30 days or every billing cycle.

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.

Unless you are absolutely sure you can pay in full before the end of the introductory period, don't sign up for these retailer's credit cards in the first place. It is better by far not to get into debt in the first place and to pay cash for these purchases. If it simply is not possible for you to pay for these purchases in full upfront, use a traditional credit card instead and pay off the balance as quickly as you can. You may not get a deal on the purchase price of the item, but you'll save yourself a lot of money in interest payments over the long run.

In conclusion, then, a retailer's credit card can be a good thing to have if it's a store you shop at a lot and you regularly pay down your balance completely. However, if you don't shop at the store a lot and are only signing on for a retailer's credit card as part of a "special" deal in hopes you'll save money in the long run, be careful. Retroactive interest charges will come back to bite you if you don't pay down the balance by the end of the promotional period, and you'll be left paying a lot more than you would have if you had paid cash or even used a different credit card.

Keep in mind that no matter what kind of credit card you use to make a purchase, you should always make sure to pay off your balance as quickly as possible. In fact, it's best not to carry a balance on your credit card for more than 30 days ? this will prevent your having to pay interest. Credit cards can be a big help, but you need to use them very responsibly.