Best Buy Store Card (Financing)

Where you can talk about store credit cards, like gas station cards, department store cards, etc.
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KitKhat
 
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Best Buy Store Card (Financing)

Postby KitKhat » Fri Nov 13, 2015 6:03 pm

So I'm a recent grad of a year with a fairly good credit score 780's and wanting to buy something from Best Buy. I have a job and can easily pay the monthly expenses but I'm worried that by opening this card (Line of credit) that it will hurt my score?

I'm hoping to buy a home sometime in 2017 and just want to make wise choices now before my credit is ruined!

Is it worth financing the item or just waiting till I can straight out buy it?

Thanks for any tips


Vermonster
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Re: Best Buy Store Card (Financing)

Postby Vermonster » Sat Nov 14, 2015 7:02 am

Well for starters, when looking to buy a home, the suggestion is that you don't open any large lines of credit a year before the mortgage application. If you can stretch that to 2 years, even better.

Now the Best Buy card is not exactly a recommended card. A lot of people get into trouble with it due to some confusing terms and misleading advertising. When you use the card to finance a purchase you pay no interest if you pay the whole balance off in the 6 months. But if you leave even a penny on the balance they are allowed to charge you interest on the full amount for the 6 months you carried the balance. You will probably be fine, but just keep that in mind when you have something come up that may interfere with your plan to pay.

You also want to make sure you only charge one purchase at a time on the card. Say you finance a $2k TV then go back a week later to buy a speaker setup for $200. Now your payment needs to not only cover the original planned amount of the $2k TV but you need to pay the full $200 of the speaker system to avoid paying interest. There are many stories of payments being allocated incorrectly so that you will eventually be forced to pay the interest on the larger item.

Personally I find the Prices at Best Buy to not be worth the hassle. If you find what you are looking for elsewhere you could just apply for a standard credit card with a lengthy 0% period. I have seen offers for the Citi Double Cash that will give 18 months at 0%. That would give you some real cash rewards and the financing you are looking for, plus a card that will stick with you for the long term.
Chase Freedom $9k~~Chase Sapphire Preferred $6.5k~~Amex Blue Cash Preferred $12.4k~~Citi Double Cash $4.7k

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Vattené
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Re: Best Buy Store Card (Financing)

Postby Vattené » Wed Nov 18, 2015 5:46 pm

How long is your credit history, and how many accounts do you have? A 780 on a thin credit profile doesn't mean much, and you may be better off opening accounts NOW so you can let them age and build up history by the time you are ready to apply for a mortgage. I recently got a mortgage at the best terms available while my most recent new account was 6 months.

You have over a year, so getting new accounts now may help you. Without repeating Vermonster's advice, that doesn't mean Best Buy is your best option.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

takeshi
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Re: Best Buy Store Card (Financing)

Postby takeshi » Thu Dec 17, 2015 8:59 am

KitKhat wrote:So I'm a recent grad of a year with a fairly good credit score 780's

Where is this score from? What scoring model? Which CRA?

Keep in mind that you don't have just one score. There are many FICO models used by creditors. For most you have a score with each of the 3 major CRA's. Always consider both the scoring model and CRA when referencing scores. Also consider the relevance of a model/CRA combo to a given creditor. For example, a TU FICO 8 isn't going to matter to a creditor that uses an EX FICO 8 Bankcard or any model/CRA combo that is not EX and FICO 8 Bankcard.

KitKhat wrote:I have a job and can easily pay the monthly expenses but I'm worried that by opening this card (Line of credit) that it will hurt my score?

I'm hoping to buy a home sometime in 2017 and just want to make wise choices now before my credit is ruined!

We'd really need a better idea of your credit profile to give meaningful feedback. Impact is never just about an a change by itself but one's credit profile and the how the details of the change would impact that credit profile. Person A could be intending to buy a home in 2017 and get the Best Buy card with little to no impact. Person B could also be intending to buy a home in 2017 and get the Best Buy card with a bigger impact. Odds are that even in the latter case the impact from the new account would be reduced and maybe even recovered by the time that person applied for a mortgage.

As stated above, if you have thin profile you'll want to put in the work right now to thicken and build that profile. To assess that we need an understanding of the number, types and ages of your credit accounts as indicated on your reports. If you're not regularly pulling and reviewing your reports then get started on that right now.

KitKhat wrote:Is it worth financing the item or just waiting till I can straight out buy it?

Worth is always highly subjective regardless of topic. Even with the info in your OP there's not enough for us to give you a meaningful example. It could be "worth" it either way depending on additional specifics. It's more meaningful for us to start with a better understanding of your credit profile versus jumping to this question.

In terms of store cards in general, they can be useful if you shop a lot at the given store and can make use of the benefits of the store card. However, if you need to build your credit profile it's possible that a credit card may be more versatile and possibly of more use to you. An additional general consideration is that you shouldn't be spending what you don't have.

kdm31091
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Re: Best Buy Store Card (Financing)

Postby kdm31091 » Thu Dec 17, 2015 1:28 pm

KitKhat wrote:So I'm a recent grad of a year with a fairly good credit score 780's and wanting to buy something from Best Buy. I have a job and can easily pay the monthly expenses but I'm worried that by opening this card (Line of credit) that it will hurt my score?

I'm hoping to buy a home sometime in 2017 and just want to make wise choices now before my credit is ruined!

Is it worth financing the item or just waiting till I can straight out buy it?

Thanks for any tips


You can take advantage of financing offers, sure, but like takeshi said, don't spend what you don't have or you will fall into a black hole of debt before you know it. 0% offers only float you for so long. I'm not saying this to be harsh. I'm just saying it because a LOT of people fall into the trap, hence the large amount of CC debt many people have

Anyway, as far as the store card, like alluded to above, you generally want to avoid opening new lines of credit well before a mortgage. 2 years is great advice because you will then have basically zero inquiries in time for the mortgage. Remember, a good mortgage rate should be the top priority. Any credit cards rewards you gain by applying for cards beforehand will be far, far outweighed if your mortgage interest is higher because of the recent CC apps.

Stated differently, CC rewards are chump change compared to mortgage interest so you want the best mortgage rate possible and delay CC apps. This is just general advice but in most situations you're better off not apping. Wait til the mortgage is done and over with.



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