High Interest

Where you can talk about store credit cards, like gas station cards, department store cards, etc.
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babybear9925
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High Interest

Postby babybear9925 » Sun Dec 14, 2014 7:20 pm

I was looking at Belk Credit Card the Interest rate 24.9% i was wondering why the interest is so high


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Vattené
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Postby Vattené » Sun Dec 14, 2014 9:16 pm

That is pretty common for store cards. Regardless of one's creditworthiness, expect to get a high APR.

Prime cards (e.g. Discover it, CSP, Amex BCE, etc.) are the ones competing for better terms; store accounts are after a different market. It comes with the territory, but if you PIF the interest rate it moot.
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babybear9925
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Postby babybear9925 » Sun Dec 14, 2014 9:50 pm

i always thought 24.9 was default rate that is really really really bad Interest rate i mean it could like half of 24.9 Apr

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Vattené
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Postby Vattené » Sun Dec 14, 2014 10:31 pm

Yeah, it is way up there. My Amex card is half that, but I have Comenity store accounts that are higher than that. I just checked my most recent statement and my Macy's card (one of the only store accounts I still use on rare occasion) is at 24.5%. If you don't think you will be able to pay ALL of the charges you make in full, you're probably better off avoiding those accounts.
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flan
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Postby flan » Mon Dec 15, 2014 8:01 am

Vattené wrote:Yeah, it is way up there. My Amex card is half that, but I have Comenity store accounts that are higher than that. I just checked my most recent statement and my Macy's card (one of the only store accounts I still use on rare occasion) is at 24.5%. If you don't think you will be able to pay ALL of the charges you make in full, you're probably better off avoiding those accounts.


The only reason to have a store card is because there are benefits, like discounts, or access to sales, that exceed what you'd get otherwise. Or you can't get anything else; the underwriting requirements for store cards are usually pretty loose.

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Vattené
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Postby Vattené » Mon Dec 15, 2014 10:49 am

Agreed. I highly recommend them for building/rebuilding. It beats having money tied up in a secure card when, at least as far as I know, they are approximately as easy to get.

Now I only use them for bigger discounts than I could otherwise get. Macy's, for example, will send out several coupons exclusive to cardholders. You still have to watch these, though. I tried to use one online on Black Friday, but they couldn't be used for the special sale prices. So be it, I just let them pay Discover a swipe fee so I can get the extra cash back. I just purchased something from Kohl's yesterday, but my Kohl's card didn't get me anything special, so I favored using Amex for the regular MR (at least it is something).
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ingramjuan
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Postby ingramjuan » Mon Dec 15, 2014 8:15 pm

Belk's 24.9% interest rate is just about the same as other store brand cards.
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Brad Bishop
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Postby Brad Bishop » Tue Dec 16, 2014 6:24 am

I remember the days of store-issued credit cards. Most people carried things like:
- Sears Charge (credit card but called a Sears Charge Card)
- JC Penny
- specific gas station cards (Exxon, Amoco, Shell, etc.)

The idea was that Visa and MasterCard and, less so, American Express, may be accepted by a retailer but you knew your Sears Charge was going to be taken by Sears.

I remember when that's all Sears took. American Express was more for travel and dining than everyday purposes.

In the 1980s Visa and MasterCard gained more of a foothold in retail and became commonplace. So much so that most stores switched to being co-branded cards in the early 1990s. You may have a Sears Visa or a JC Penny MasterCard. Gas station branded cards went the same route so you'd have your Shell MasterCard or Exxon Visa.

At the same time each of these establishments went to just accepting Visa and MasterCard and, maybe, American Express.

When that happened I remember thinking how it didn't make sense to have a Sears, Exxon, etc. card and just to have regular Visa and MasterCards issued from a bank. The co-branded cards always had the higher interest rates and it wasn't like I was getting any special service from them or anything.

At this point I'd say that, unless you're trying to build credit and this is the only way to go for you (surely some bank will give you a Visa or MasterCard, though), or unless you love the store and there are some perks/discounts with the store-branded card, I'd just skip it and get a normal Visa or MasterCard.

Side note:
One of the current branded cards that makes little to no sense to me is the Disney Visa card. With this card:
- you earn 1% in Disney Dollars (can only be spent at their resorts or at a Disney Store)
- you get a card of your choosing with a character or castle or something similar on it
- there are some special meet-and-greets with the characters that you can get into with the card but, really, these are fairly limited and you can meet-and-greet characters just about anywhere.

My thought, and I've had this argument with people on a Disney forum before, is: Why not just get a normal Visa with 1% cash back which you could certainly put towards your Disney vacation, if that's your choosing OR you still have 1% which you could put towards anything else? The argument back: BUT IT'S DISNEY!!!
- It makes no sense to me.

whit
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Postby whit » Tue Dec 16, 2014 2:57 pm

Brad Bishop wrote:My thought, and I've had this argument with people on a Disney forum before, is: Why not just get a normal Visa with 1% cash back which you could certainly put towards your Disney vacation, if that's your choosing OR you still have 1% which you could put towards anything else? The argument back: BUT IT'S DISNEY!!!
- It makes no sense to me.


marketing at it's best

plus what's the point of having something if you can't enjoy it?

and that's what sales people are great at capitalizing

depending on where peoples' priority lies, some wouldn't mind paying a bit more or earning less if it means they have something they love or makes them happy every time they whip out the Disney card

takeshi
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Postby takeshi » Wed Dec 17, 2014 1:56 pm

babybear9925 wrote:i always thought 24.9 was default rate that is really really really bad Interest rate i mean it could like half of 24.9 Apr

There may be default rates of 24.9% but that doesn't mean that all 24.9% APR's are default rates.



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