Does Home Goods Credit Card Hurt You More Than It Helps?

I actually never had shopped at Home Goods until last fall.

I had just purchased my first house and as part of the deal, I negotiated for them to throw in the furniture and accessories (which were placed there by the realtor’s staging company).

Some of those items were purchased from Home Goods store, new with their tags and a recent receipt intact.

So for the items I disliked, I packed ‘em up and returned them to the store to get a merchandise credit. That’s when I was pitched the Home Goods credit card, which sounded alluring.

Good rewards, but with a catch

The card gives 5 points per dollar spent at Home Goods, as well as TJ Maxx and Marshalls which are owned by the same company.

Since there is a $10 rewards certificate for every 1,000 points, this basically means the card is earning a 5% rebate at their stores.

HomeGoods MasterCard vs store card

The catch? The interest rate on both the Home Goods MasterCard and store-only card are quite high. If you don’t pay your statement off each month, be prepared to be whacked with a 26.99% APR. Of course, that pretty much negates the value of the rewards if you carry a balance for even as little as month or two.

interest rates for both versions

Who should – and should not – use it?

If you always make your credit card payments in full, then this can be a good way to essentially shave 5% off the prices. If you shop there a lot, the savings can really add up over time.

But if you occasionally pay over time, then the credit card from Home Goods will be a bad idea. Even if you have a mediocre credit score, you should be able to find another card that has a lower APR than what this one charges.

Also it’s worth mentioning that GE Capital Retail Bank is who’s behind these two cards. Their customer service has a reputation of not being lenient with waiving late fees and the like. So make sure your payments are on time!

Of course the biggest benefit that Home Goods gives is the 10% off first purchase with approved application. If you use that strategically and plan a big buy of home decor and furniture, that 10%  can equal a lot of money. But keep in mind even if you spend $1,000 that only equals a $100 bonus, which is what you will find on many credit cards nowadays.

Written or last updated June 14, 2013

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