Guitar Center Credit Card Review

Guitar Center store in Hollywood, CAHere in So. Cal I have a lot of friends who work in the music industry. Recently I was with one of them at the Guitar Center Hollywood location (which as you can imagine, has a very sweet selection… guitars that cost as much as a Porsche!). Now my friend was eyeing a more reasonably priced one that was “only” around $4,000. She could have paid in full, but the Guitar Center credit card promotion sparked her interest…

Quick Summary: You need to be careful about the Guitar Center card because, like many store cards, it charges retroactive interest if you don’t pay it off in full within the 0% window. You would be better off with a card that doesn’t do that.

Here’s the promo the Guitar Center card was offering when I was at their store with my friend:

  • Promotion was valid for purchases “on over 100 participating manufacturers”
  • No interest if paid in full within 1 year (the duration you are offered may vary — online they advertise plan durations of six months, one year, 15 months, 18 months and 24 months)

My friend heard that and said “No interest for 1 year? I can’t go wrong with that.” Well, actually you can… because it’s not necessarily an interest-free credit card. Here’s why…

How the Guitar Center credit card’s “no interest” offer really works
With general use credit cards (like a Visa or MasterCard from an issuing financial institution like Bank of America or Wells Fargo) if they advertise 0% on purchases for 12 months, that is exactly what you get. You won’t have any interest during that time (unless you start making multiple late payments, but that’s another topic). Unfortunately, the Guitar Center Preferred Player credit card works differently…

In the fine print, this is what it says word for word (I’m copying it directly from the website):

“No interest charges on the promotional item(s) if paid in full within the specified plan duration. If the balance attributable to the promotional item(s) is not paid in full in the specified plan duration, interest charges will be imposed from the date of purchase.”

So if you can’t pay off every single dollar before the promotional period is up, you will be slapped with interest going back all the way to the date of purchase. In other words, you’ll have to pay all the interest payments you *would* have been charged if you’d never gotten the 0 percent deal.

When you consider that the Guitar Center credit card has a VERY high APR (22.9% at time of writing), you could end up paying a LOT of interest on your purchase. Especially if you’re buying something as expensive as the guitar my friend was looking at. The Guitar Center’s card requires monthly minimum payments of 3 percent of the remaining balance. If my friend were to have made only the minimum payments over a year (which, of course, would mean that the balance would not have been paid off at the end of the 0 percent period), she’d have gotten hit with retroactive interest charges of more than $800.

What should you do?
After reading this credit card review, you might have came to the same conclusion as my friend did… she took a pass on applying.

If you absolutely know that you’ll be able to pay off the balance in full before the end of the promotional period however, this card may be a good financing tool. Still, if you have decent credit, I personally would avoid the Guitar Center card. At any given time there are plenty of zero interest credit card offers out there that give 0% on purchases with no threat of retroactive interest. While a year or more may seem like plenty of time to pay off a large purchase, life can disrupt your best-laid plans. And a credit card that won’t ever charge back interest seems like a much safer way to go.

Review last updated February 2016

 
Comments
The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

I don’t get what all the fuss is about here. I am a recent GCGC holder and all of the promotional offers I have received so far include a monthly payment that is rounded up to the next whole dollar. That means if you just make the minimum payment then you will have paid off the purchase BEFORE the period ends. I don’t know how it is for everyone else but GC and Synchrony have been fair with me thus far and I have several accounts backed by Synchrony.

I just got a notice that now that Synchrony Bank has taken over the account, my already high interest rate of 21.9% is going to shoot to 29.9% on August 21st of this year. Is this how you treat a preferred customer? Really? Lates GC and their new bedfellow Synchrony Bank.

GC employee here.. If you read the terms and conditions of the GCGC application, and the e-consent form at the time of purchase, it clearly states that the intrest is deferred, not “retro active.” There is NO SUCH THING AS AN INTREST FREE LUXURY CREDIT CARD, hence the term CREDIT. It clearly states that if you dont pay off the ammount charged to the credit line at the time of purchase before the promotional period ends, it will incur negative amortization at 21.9% APR. Not to be disrespectful but if the author of this article was any kind of reputable employee he would know this, especially in so.cal. which has “multi million dollar a year” sales reps who make most of their sales through SPO4.0(online store) and GCGC, especially someone who worked at the Hollywood store.. you guys dont have “a” platinum room, you have “THE” platinum room.

This CC from Guitar center is just fine …you have to make your payments on time and you can avaid all the high interest by paying the thing off and not over extending yourself… the stores and staff know what they are talking about, i’m happy with them and the CC

The real issue is that the minimum payments don’t cover what is really the minimum to escape without getting slapped with the interest. If the real minimum reflected what it really was then I wouldn’t care so much.

Hi. I’ve have a GC card for years. The main reason is that other companies don’t have their own cards and full payment is due up front. GC has what I want. The key is to be a smart shopper by knowing your turns up frontand paying on time. The other way is to go to a credit union for a low interest loan once you’ve made your deal at GC.

So, the GC card is CLEARLY stating that they are giving you 12 or 18 months to pay off your debt. They are giving you the $4000 instrument NOW, just for your signature (GC PAYS for that service. Capital One does not offer it for free.) GC pays Capital One so you can have a period of time to pay back. Now, if you are not responsible, you will pay. Why is that so strange?
Do you, sir, offer better loans? I would take from you a loan on $4000 and then pay it back in 60 years with no penalty. If I die, maybe my grandson’s grandson will take care of it. It might go to 100 years but hey, that’s wbat we should expect, right?

I have to agree with this concept it is a standard among retailers…..& true you got to be responsible individual. It’s analogous to owning a car and driving down street. Just how much are you willing to enjoy the privilege driving your new digs while paying for it. Like the song…taking care of business. Then, again we can always rant….Hmmmm…knowledge does bring change.

I don’t think the author is implying that the offer is necessarily predatory or misleading. It does, however, use language that some people may find difficult to fully understand without taking time to think it through. I think his point is simply that a person should be careful, make sure they fully understand the terms, and make sure they’ve done the math and risk assessment for their individual financial situation. When you see something (like the Gibson SG I recently purchased) that you absolutely HAVE to have, its possible to get swept up and look over key points.

The difference between the GC (and other stores’) card is that they repeatedly offer promotional financing. Sure, you can get an introductory interest rate from other standard credit cards, but once they have you, they won’t offer it to you again. They might offer you promotional balance transfer rates, but that’s because you pay a transfer fee, and if not paid off, interest to them instead of another company.

Bottom line: it’s all about how responsible you are paying it off in time. The 12- or 18-month promotional rate is a financially WISE move. It’s called Time Value of Money. It’s just critical that you pay it off in time.

Rick, I agree with your statement; it’s a good deal for a responsible person, one that does not make late payments, and pays off the debt within the promotional rate window.

In summary, the GC Credit Card is a good deal for a responsible person.

I was okay with the financing deal – if you pay off in time you don’t have to pay interest as this is pretty standard. However, when the bill arrived, there was NO promotional period as promised when I made the purchase over the phone. They told me 18-months in the store, 12-months via email when the order was confirmed, and then 6 months when I called back with the dispute. Guitar Center Preferred Player Card (Capitol One)told me that they couldn’t resolve it by the due date but would note it in my file. So, do I pay it off and cancel the card? Or do I wait and see if they can resolve it and then dispute the interest? And, if there is a promotional period, just what the heck is it? What a SCAM. I could have just used another credit card or paid it off – I only opened this one for the promotional period.

FWIW, I was one day late on a payment for a Mac and I nearly had a heart attack. The phone rep said that usually the penalty APR is truggered by paying a lot later than being one day late. I won’t take that chance again, but maybe others have had the same experience?

Yeah, as other posters have said, this is nothing new. Every credit card that offers you 12 months of interest free financing has the same rule. My fiancee financed my engagement ring with a Helzberg credit card. He paid the ring off within 6 months and he didn’t pay one penny in interest. When it comes to credit cards, as long as you know the rules and follow them to a T, you won’t get screwed over for the most part. I was just approved by guitar center for a credit card through them. I made sure I knew the rules in advance and as long as I play by them, I won’t pay any interest either.

I’ve never paid any interest to Guitar Center either. When we do our shopping sprees I always take advantage of the “no interest” offers. This past Christmas they had an 18 month offer. I determined what monthly payment we could afford, multiplied it by 18 & told the family “this is our limit”. Plus we had a $300 off coupon for purchases over $1000. Sweet deal. As soon as we got home, I accessed my account online & scheduled a year’s worth of payments (they won’t let you schedule more). This way it’s paid automatically, I don’t have to worry about sending out a check or logging on each month to pay it. I make a note in my check register to remind me that it’s coming out of our checking account every month. One thing though: you cannot buy anything else with the card during the time you are paying off the interest free purchase. They have ways of finagling your payment so not a whole lot of it goes towards that purchase. But for us it works. Guitar Center is a once a year treat for us. If you pay attention to your budget & spending habits & are disciplined enough to not overspend & then PUT THE CARD AWAY until you’re done paying it off this is a pretty good deal.

LOL, yeah this isn’t anything new. Welcome to the world of credit cards.

The person who wrote this article is probably a young individual who is not well versed with credit card tactics. Most store credit cards are like this nowadays

It’s interest free of you pay within the 12 month time frame. If you don’t you get the interest compounded over the 12 months. Sounds easy to understand to me. They even tell you that when you apply for it. Lesson to learn for today…stop using credit cards. Like my 93 year old grandmother says “If you don’t have the money to buy something then you don’t really need it.”

I have had a Guitar Center credit card for years. I’ve bought maybe 10,000 dollars worth of stuff on it over the years, always utilizing their promotions. I’ve never paid one single cent of interest. Am I rich? No. But, I know my limits & I pay attention.

I also have a Best Buy card (same type of situation), again, never paid interest. I would finance a pack of gum for a year with no interest (or deferred interest, whatever) if I could.

Even if I have the $1000 to buy a new whatever, I’d always prefer to use someone else’s money (i.e. the credit card company) than my own. For every one person who pays off their promotional purchases on time, there’s gotta be at least 10 who don’t & get whacked with all that interest. So as long as there’s irresponsible people out there, I can keep enjoying using other peoples money for my purchases. Thanks!

Also, you should be aware that they will not take payments from other cards. So, my business card that I was planning on using to make payments throughout the year is off limits. I don’t really trust them at this point and am regretting doing business with them. Now I have to go through the inconvenience of mailing a check every month. I decided to pay the whole damn thing off and be done with it.

I work in the credit card collection business and that is the way it is with all credit cards. So in the future when applying for credit make sure you read the entire application even the fine print before you sign (I know the application is long but if you dont read it and you sign it then you will have entered into a binding contract)

This is absolutely the way virtually all retail store promotional credit cards work. When it is a 6 month or 1 year deal it is run by a financing company, often GE or one of the other big names, and be it Guitar Center or whatever, it will be the same. If you handle it right you are fine. If you have good credit and can get a 0% interest major card somewhere else that is often less risky but, many of them now boost your rate to 22 – 29% if you default. The key is, don’t overspend your finances and pay on time. Doing that, it is hard to go wrong with either method. If you have any doubts of doing that, don’t buy this way or just put it on a major credit card and pay your monthly interest for the advantage of owning the item immediately. This is normal SOP. Don’t overspend, keep on top of your bills each month, and do pay them on time. That way you are in perfect shape.