Department Store Credit Cards - What You Need To Know

Department store credit cards are among the easiest credit cards to get, and also the most expensive to use. The standard rate on a department store credit card can be as high as 24.99% and go even higher if you make a late payment or go over your limit on the card.

The reason departments stores make it easy to get credit cards is because they know people are more likely to justify spending money there if they can charge it.  It doesn’t feel as much like money that way, and then, once you’ve used the card, the department store also makes money on interest if you don’t pay the balance off in full when you receive the bill.

Another way a department store credit card can lure you into making bad financial decisions is by persuading you to shop at a department store, because you have the card, when in fact you can get the same or better merchandise at a much lower price elsewhere.

If you buy something this way, then carry a balance and let interest accrue on your purchase, you are stung twice. Chances are good that if you fall into the habit of doing this you will not even notice you are overpaying for the things you buy, since your focus will shift almost entirely to the department store and what it can offer.

For a good article critical of department store credit cards, go to:

http://www.consumertipsreports.org/the_treachery_of_department_store_credit_cards.html

On the other hand, if you have just emerged from a messy divorce or other life disaster and are in need of credit repair, department store credit cards can be a good way to go if you have the discipline to pay them on time and pay them off. The idea behind credit repair with these cards is to establish a good payment history through the department store credit card, then apply for a major credit card with a better rate and close the department store card down for good as soon as you get it.

Obviously, if you keep the department store credit card and keep the major card too, running up balances on both and accruing interest on both, you will destroy yourself with your own strategy. This is a remarkably easy thing to do, and department stores count on you doing it.

If you want to apply for a department store credit card, at least shop around and check interest rates and terms. Are discounts offered? Does the store offer a wide variety of merchandise at decent prices, or is it somewhere you would normally never shop if you didn’t happen to have the card?

If you are considering a department store credit card because those cards are easier to get, but you don’t really shop at department stores, you might also consider applying for a gas station credit card instead.

Often gas station cards are also easier to get and they can frequently be used for other merchandise such as hotels, repairs, restaurants, and travel supplies. Often they offer special discounts and deals on gas, rental cars, and vacation planning, and some have great perks that can be traded in for merchandise or other kinds of discounts.