Are you looking to enjoy extra discounts at your local department store? Are you wondering what freebies you can get during the biggest annual sale of the year? Have you been thinking about that interest free credit card? Well, to enjoy all of these things and more, you need a department store credit card.
Let’s face it, a free line of credit is the hardest thing to pass up. Not only does a department store credit card come with an array of benefits but it will also revitalize your shopping experience.
But before you sign up, it is important to understand the merits and demerits that come with a department store credit card. Here are the pros and cons that you should consider:
The Pros of Department Store Credit Cards
- Sign-up discount, regular discounts, and freebies
When you sign-up for store credit cards, you will enjoy discounts on the items that you purchase. As such, you will be able to save a good amount of money should you decide to sign up on the spot.
Additionally, store credit cards come with regular discounts that you can take advantage of all throughout the year. These discounts are offered to all customers who own store credit cards. For instance, you can enjoy 30% off sales on a few items.
We are not done yet! The freebies are definitely something to write home about! Imagine earning gift cards and reward points that will enable you to purchase what you want from the store without payment. Yes, a department store credit card will ensure that you make the most out of your shopping experience by spending less for more.
- The ability to build your credit rating
Looking to develop your credit score? Department store credit cards will help you do this. If you utilize your credit card responsibly then you can not only rebuild bad credit but also develop your credit history in the right way. Just remember to keep your accounts in good standing and you will be well on your way to a good credit score.
- Interest-free financing
This is where your interest-free credit card comes in! By choosing an interest-free credit card, then you will enjoy an abundance of budget-free purchases, without having to worry about accumulative interest rates. With this type of credit card, no interest will accumulate on your card provided you settle your debt in a period of six, eighteen or, twenty-four months. All you need to do is to shop around for the best credit card plan possible because a number of stores provide interest-free financing plans.
The Cons of Department Store Credit Cards
- Hard inquiry processes
The process of running a credit check when you apply for a department store credit card is referred to as hard inquiry. This check is mandatory for all new credit card applicants because it means that you are opening a new line of credit. The hard inquiry results are included in your credit report. However, if you have a low credit score when applying for a new credit card is never a wise financial move.
- Small credit limits
In comparison to traditional credit cards, department store credit cards have much smaller credit limits. As such, it may be easier to rack up debt with this kind of credit card because you will quickly get to your limit in a short time. Also, utilizing too much of your available credit limit means that your credit score could easily drop because your debt-to-credit ratio will skyrocket.
- Late repayment fees are costly
When it comes to money matters, we have all missed a due date at one point or another. Do you remember when you had to pay your loan a month ago and you paid it two weeks after? Well, the same applies to owning a department store credit card.
You may be late in making your payment and will be faced with costly late payment penalties. This is why being a responsible credit card owner matters. When you make your payments in time then you will grow your credit limit as well as your credit score.
However, late payments will not only lower your credit costs but also leave you to settle expensive bills that you did not anticipate.
The Bottom Line
There you go! All the important things you need to consider before applying for a department store credit card! But even so, it is important to remember that while getting this credit card seems like a tempting idea, you should always analyze your financial objectives before settling on one. It is best to be a savvy shopper who is always ready to pay on time.