December 14,2006
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Retail Card Discounts Aren't So Hot
If you carry any department store cards, you've received the flyers. Sales for Veteran's/Memorial/Labor Days, touting huge sales, PLUS an extra percentage off for cardholders using their plastic. Sounds like an irresistible deal, right?
Not so much. Generally, retail store credit cards carry whopping interest rates, double or triple that of the average general-purpose card. So, if you don't pay off your balance in full each month (and with the deals these stores promise, who could resist a shopping spree?), you may be dealing with a finance charge much higher than the discount you got for using your card. Broadly speaking, a general-use card is always a better bet than a store card, unless you can pay either your entire balance or a large chunk of it off each month.