How To Avoid Trouble With Store Credit Cards
Store credit cards, also known as retail credit cards, are neither the safest nor the riskiest option when it comes to making purchases on credit, and they are neither the easiest nor the hardest to qualify for. They are also not new; they roamed the Earth at the same time as Diner’s Club. Perhaps your parents even bought you clothes at Sears, JCPenney, or Macy’s for school picture day and paid for it with a store credit card. Even in the midst of buy now pay later (BNPL) and asking your friends to send you money on Zelle, retail credit cards have begun to experience a resurgence in popularity. Approximately one third of consumers plan to use them this holiday season, including those who plan to open new accounts. If retail credit cards are contributing to your debt problems, contact a Miami debt lawyer.
How Easy Is It to Get a Retail Credit Card?
Many major retailers issue store credit cards. These can be department stores such as Macy’s, Kohl’s, Target, and Walmart, as well as retailers that operate entirely through online sales, such as Amazon. Kroger, the nation’s largest grocery store chain, also has a store credit card; Kroger does not have any physical store location in Florida, but it delivers online orders to Florida customers.
Most store credit cards require a credit score of at least 640, which is considered a fair, as a criterion for eligibility. This means that they are easier to qualify for than conventional credit cards such as Visa or MasterCard. The bad news is that retail interest cards carry higher interest rates; the average interest rate is 26 percent, but some have interest rates above 30 percent.
Store Credit Cards Work Best If You Can Afford to Shop Without Them
Retailers often offer promotions where you can get a deep discount on your current purchase if you open a store credit card account and use it to pay for the purchase. These promotions also include an initial interest-free period, usually six months. In this situation, you can save a lot of money by opening an account. The store may also offer discounts on future purchases when you choose the card, so you can likewise save money if you pay off the balance almost immediately after making the purchase.
The problem is that most people cannot afford to do that. Even if you make partial payments during the interest-free period but don’t pay it all the way off, a 26 percent interest rate means that the purchase could easily cost you more than the sticker price. Store clerks might try to tell you that retail credit cards are just like clipping coupons, but if you have any pre-existing financial hardships, they can easily be at least as risky as BNPL.
Don’t Let Store Credit Cards Tempt You Into Getting Deeper Into Debt This Holiday Season
A South Florida debt lawyer can help you access credit when you have a troubled or limited credit history. Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.