When do department store credit cards make sense?

Where you can talk about store credit cards, like gas station cards, department store cards, etc.
35 posts
CreditCardGuru
 
Posts: 129
Joined: Tue Apr 01, 2008 1:48 am
Location: Austin, TX

When do department store credit cards make sense?

Postby CreditCardGuru » Tue Apr 08, 2008 2:12 am

I’m sure you’ve been there… you’re at checkout when the cashier asks you “Would you like to open up our store credit card and take an extra 10% off today's purchse?” In fact, not only am I sure you’ve been there, I’m sure you’ve been there a lot more lately. That’s because department stores and retailers are releasing and offering their own credits cards more now than ever before. We’re all tempted by the extra savings once in a while... but when is it really worth it?

If you don’t have the best credit and are trying to make it better, department store and gas station credit cards may very well be a good place for you to start. As opposed to Visa, MasterCard, or other major credit cards - store cards are usually easier to qualify for. But beware, they almost always come with a high interest rate. This is why experts recommend only using store cards to rebuild credit, and not for financing your purchases. As with any credit card, when you apply there is a "hard pull" inquiry made which can reportedly lower your credit score by up to 20 points in some situations. So even if you qualify, and you want that one time 10% off… make sure to run the numbers first to see if that store credit card really makes sense.

Take Nordstrom – with a sky high 21% interest rate, you’ll need to spend 2,000 bucks just to get a measly 20 gift certificate. Is a 1% rebate really worth it? Or take Bloomingdales, where you don’t even start earning rewards until after your first $1000 in purchases annually. What’s their interest rate? Even worse… 21.7%. Some stores such as Gap aren’t quite as bad – a 16% APR and at least you get a $10 gift certificate for every $250 you spend - that's a 4% rebate. But it’s the Gap, not Tiffany’s… how many dollars will you really be spending there a year? In all fairness, most store credit cards seem to offer one benefit – special sales for their cardholders. My grandma use to make all her home and apparel purchases at this department store called Elder-Beerman, and boy would she buy a lot… so for her I think it was a benefit to have their store credit card, which she did. But will these rewards outweigh the risks for you?

Gas station credit cards may benefit you if you’re rebuilding credit. If not, run the numbers. Sure, your Shell or Mobil credit card may offer a 3% discount on their gas… but isn’t their gasoline usually at least 3% more than the cheaper gas stations anyway? This is why you need a credit card that offers you high rebates on all your gas purchases, whatever station you choose (visit our Rewards forum to learn about these options). A benefit gas station cards offer you that many people forget is that they can be used to purchase car maintenance at their service stations. This may be a benefit to you if you are rebuilding credit and don't have the money to get your car back on the road. They also usually offer travel benefits. However many normal credit cards such as American Express usually offer travel rewards and discounts too which are better. My two cents is you should really only open store or gas station credit cards as a way to repair your credit.


1bootcamp
Centurion Member
Centurion Member
 
Posts: 103
Joined: Wed Apr 16, 2008 2:07 pm
Location: Big Island, Hawaii

Postby 1bootcamp » Wed Apr 16, 2008 2:13 pm

Yeah I won't go with store credit cards they don't offer you enough benefits to make it worth it. I don't get why people sign up for them when they don't need it for building credit. I mean isn't it stupid to only have a card you can use one place like Abercrombie that doesn't offer any rewards that are better than a normal credit card? Makes ZERO sense to me.

User avatar
alsteig
Platinum Member
Platinum Member
 
Posts: 95
Joined: Sun May 23, 2010 5:28 pm
Location: San Diego, CA USA

Stop opening store cards

Postby alsteig » Tue Jun 01, 2010 12:12 am

More people need to read this. Please stop opening store credit cards it hurts your credit and have poor rewards, yes the girl or guy that is working at the register is cute and you save 10 bucks on your purchase. Please think about your entire financial future and how 5 minutes with a minimum wage employee can affect it.


ms277017
Green Member
Green Member
 
Posts: 11
Joined: Fri Aug 19, 2011 6:46 pm
ICQ: 185628805
Location: Tyler, Texas

Agreed

Postby ms277017 » Sun Aug 21, 2011 6:36 am

I have three store cards, BUT I am LOYAL to the bone haha

What you guys are saying is spot on though for the standard normal distribution of US card product consumers. Retail cards are not good for your report.

Are store cards ever a good deal? Nope. However, IF you are loyal and have a charge card mentallity etc. AND you just adore that store and are going to spend 2k or more per year there... Ok perhaps, but do not be under the delusion your going to get anything in return though. However, If it comes down to just paying cash or using a retail card and paying in full before the statement ends. I will choose the latter option because I am in the 0.03% of card consumers who the store owes a big thank you, haha we will not get into that mess :)

I spend around 2k per year at JCP, around 3k at Walmart per year and roughly 1.2k at Lenscrafters per year. Notice the common bond? All of them are GEMB, oh and let me tell you that GEMB will string you up, skin you alive and eat your lunch with intrest guys/gals. I will put it to you like this: GEMB does not care if your FICO is 851, you get the STANDARD purch APR, even if you have a 650 FICO you get that same APR. That is why respected posters such as guru say stay far away. Straight and simple charge card mentallity coupled with HIGH store loyalty and a good chunk spent there per year... more power to that insignificant fourth standard dieviation of card consumers who can do all of that. Using the SND that means for the most part retail cards suck for 97.7% of the rest of us in that analogy, which isnt too far fetched.

I help my mother out quite a bit she has around a 425 FICO and I worry about her using a debit card for everything, so she is my authorized user on all three of these cards and just like clockwork she writes me statement balance checks at the end of the month instead of using her bank card. I will put it again to you like this my JCP card started with a $300 limit in NOV 10' CLI 3 times in one year 700/1400/2310 now and there will be more soon. Walmart went 800/2105 in six months and lens crafters for her and my glasses went 500/1310 in 8 months. So if you use them and you going to anyways etc you never run a balance and basically are ok with doing it for nothing haha

More power to you.

ms277017
Green Member
Green Member
 
Posts: 11
Joined: Fri Aug 19, 2011 6:46 pm
ICQ: 185628805
Location: Tyler, Texas

Postby ms277017 » Sun Aug 21, 2011 6:57 am

Like I said I am a BIG charge card minded consumer. AMEX ZYNC is my goto, I have a old cap one and a newer citi forward. I like my mix 2 majors one charge for daily cash purch and the three retail for gas, clothes, groceries and glasses. I have what I need and do not need anything else to be honest. I do around $1200 per month on the ZYNC and the forard and junk capone are locked at 7% debt-to-credit while the ZYNC, Lens, Wal and JCP all report zero every month. I make 1 transaction on the two majors a month, but idle them at 7%. Never in this life do I swipe a debit card haha

In two years I will add Discover More, hopefully product change ZYNC to Green if they ever open that up.

Adding the three retails back-to-back though did lower FICO for me... went from 704 to 698, BUT once all of the CLI's started rolling in like crazy I am now at 723. Like I said I am happy, happy, happy.

jeffysdad
Centurion Member
Centurion Member
 
Posts: 875
Joined: Thu Apr 30, 2009 2:32 pm
Location: Texas

Postby jeffysdad » Sun Aug 21, 2011 7:11 am

I used to carry department store and oil company credit cards years ago, but I believe they are completely unnecessary today. However, I can think of a scenario where a store card might be desirable. If you have a kid old enough to shop on his/her own and you want to limit his/her spending to a particular store, such a card would be useful. As noted elsewhere, Neiman Marcus doesn't take Visa or MC, so if you don't have an Amex, you'll need their store card to charge there. If a department store provides concierge-type services to only the holders of its card, it might be worth having that card then.
American Express: Blue Cash Preferred (groceries, 6%; gas, department store, 3%); Gold Delta SkyMiles (Delta Air Lines, 2 miles/dollar, free checked bag).
US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
FIA Card Services: Fidelity Amex (everything, 2%); Fidelity Visa (everything, 1.5%).
Chase: Freedom (rotating, 5%); Amazon (Amazon.com, 3%); PriorityClub (IHG hotels, 5 points/dollar); Sapphire (not in use).

*All cards are registered with PriorityClub IDine program for 8 points/dollar at participating restaurants.

ms277017
Green Member
Green Member
 
Posts: 11
Joined: Fri Aug 19, 2011 6:46 pm
ICQ: 185628805
Location: Tyler, Texas

Postby ms277017 » Sun Aug 21, 2011 7:19 am

So yes I have no kids jeffy, but I do have an aging mother who has burned every bridge with every card company you can imagine. So the limiting spending thing is basically what I am doing, she would never screw me and never has so it gives her little discounts here and there that she cannot get with her debit card, but she can get the small rewards these retail cards offer and she just loves them haha

Boy, but with her working at JCP she gets CRAZY discounts for having that plat card with her name on it. Discount for the card, discount for an employee, rewards etc. so she loves it haha

No kidding I have seen her walk out of penneys with a $500 reciept and only a $135 charge to my card which she pays off before the statement.... she has worked there for 15 years too so her employee discount is sick.


User avatar
Mogul of Pineapples
Centurion Member
Centurion Member
 
Posts: 1271
Joined: Sun Jun 01, 2008 11:32 pm
Location: Smogland

Postby Mogul of Pineapples » Thu Aug 25, 2011 2:24 am

ms277017 wrote:No kidding I have seen her walk out of penneys with a $500 reciept and only a $135 charge to my card which she pays off before the statement.... she has worked there for 15 years too so her employee discount is sick.


Anyway you can hook us up with her discount? Just kidding of course, but wish I wasn't!
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

LTomBerry
Platinum Member
Platinum Member
 
Posts: 57
Joined: Mon Apr 12, 2010 4:04 am
Location: Kansas

Postby LTomBerry » Thu Aug 25, 2011 11:56 pm

My wife spends like 2 grand a year at Target so it makes sense to have the Target card for the permanent 5% off.

DavidNY
Centurion Member
Centurion Member
 
Posts: 1332
Joined: Tue Jul 05, 2011 12:28 pm
Location: New York

Postby DavidNY » Fri Aug 26, 2011 12:29 pm

LTomBerry wrote:My wife spends like 2 grand a year at Target so it makes sense to have the Target card for the permanent 5% off.


Agreed. Nothing wrong with a discounted store card if you don't mind your purchases being tracked by the store and, of course, its PIF every month.



Return to “Store Issued Cards”

Who is online

Users browsing this forum: No registered users and 4 guests