Q: My husband and I want to buy a new TV that’s on sale at BrandsMart. Right now their credit card offers no interest if paid in full within 9 months on purchases of $298.88 and higher. If you have average credit is this a good deal?
A: If you live in Georgia or Florida (and I take it you do) then BrandsMart stores are great places to pick up deals on electronics and appliances. But their credit card? That’s another story…
Know this about the “no interest” promotions! (updated for 2013)
Almost every retailer and department store does the same thing, so I’m not singling out the BrandsMart credit card for doing this. But either way you still need to understand how the promotion works because many forum posters misunderstand this type of 0% offer.
With a 29.99% APR listed on the BrandsMart card application at the time of writing, this has one of the highest rates for purchases I’ve ever seen. However, you’re talking about using the card for a no interest promotion, so you may think this won’t apply to you? Well it might.
When it comes to these deals for “no interest if paid within X months” what you have to realize is that the “no interest” part only holds true if you pay off the full amount before the X months is up. Here is what it says:
Interest will be charged to your account from the purchase date if the promotional balance, including optional charges, is not paid in full
What does this mean? If for some reason you aren’t able to pay it all off in time then that 29.99% (or whatever the APR may be at the time) will kick in. You will be charged that interest rate going back to the purchase date.
During times like these, locking yourself into a commitment like that can be risky because if your income situation changes or you just have some unexpected bills come up, suddenly you might have trouble coming up with the money to pay it all off before that back interest is charged.
However again, I would like to point out that the credit card from BrandsMart is not the only one that does this. There’s a good chance any electronics store you go to will have the same arrangement on their store card, too.
On the other hand, major credit cards with 0% purchase offers don’t work this way. With them, there is no back interest involved and you really do get 0% for however long they promise.
Aside from that, BrandsMart gives 1 point per dollar spent on their credit card. A rewards certificate for $20 is issued for every 2,000 points earned. That means you are only earning 1% on your spending at their stores.
Despite these drawbacks, this card does have its place. For those with credit scores that aren’t very good, this might be the only card they can get approved for (because major banks will deny them). If that’s the case for you, then this store card might not be a bad idea as long as you are 100% sure that you will be paying it all off before the 0% offer expires on it. Remember if you don’t, the interest will be charged going back to day one.
So considering the (1) outrageous APR, (2) possible retroactive interest, and (3) vanilla rewards, I would recommend you go with a different card from a major bank.