Home > Personal Finance
How Much Do Store Credit Cards Cost?
Many merchants issue cards to help stimulate sales. They offer high incentives for joining and often, right along with it, high APR rates for carrying balances. They know that while you are already in the store and seeing items of want, you are likelier to sign up.
Interest Rates/APRSome merchants offer teasers. Such as Home Depot's first purchase incentive discount whose purchase balance may later go to up to 17.99% to 26.99%. There there are much reduced or even 0% APR's for the first so many months, such as BestBuy's offering 6% reward back on purchases. Frequently however companies charge in the mid 20%'s and some even to 29.99% on outstanding balances. Nordstrom cards rank among the lowest of APR's going from 10.9% and winding on up to 22.9%.
Too, special incentives in the way of lower rates may be used to entice the cardholder into making purchase on certain types of items, normally, in relation to purchases of greater-than-specifed amounts. Walmart has been known to excercise this tactic for electronics amounting to greater than $429 for 18 months, 0% interest. Also, as a variation of this, lower APR's are offered for select items. Amazon has forwarded special financing on computers, cameras and HDTV's.
In addition to interest fees on items and services being purchased, a number of companies also extend cash advances, as well as non-store purchase card features. For which the rates land at a premium.
Penalty APR'sIf timely payments are not received from the cardholder, merchants may assess penalty rates. For example at a 60 day interval from the due date. This can get expensive and, in so doing, might be cause for the account to default to a higher APR.
Charges for Minimum InterestSome store cards do have fees for minimum interest. Which is seen as low as $1.50 on some accounts.
Opting for CardsIt is sometimes noteworthy for cardholders who already possess cards to take heed when signing up for new store cards. Such cards can quickly accumulate. Total extended credit can do the same. Which can have an affect on creditworthness, if and when there is overuse.
Potential cardholders should always be aware of his or her FICA (Equifax/Experian/TransUnion) rating. That relays timely and sufficient payments and debt totals. Keeping in mind that, too, stopping or cancelling cards later on can sometimes prove to have adverse affects (possibly unthought-of prior to new card signup).
In many cases, store cards have flexible acceptance terms into their programs. Some cards, with looser acceptance, like the JCPenny card, might even render credit rebuilding possibilities.