As consumers, we are always looking for discounts and cash-back offers while making purchases. More often than not, we are on the lookout for a store credit card. These retail store credit cards do offer up certain unique advantages. But as the consumer, you need to go over the disadvantages as well.
E.g., let us take a look at the Wal-Mart credit card. According to Tanesha’s Take: Wal-Mart Credit Card,the most impressive features are the ability to save 3% on gas prices per gallon. Along with the zero-interest offers for 12 months on purchase of items worth $250 or more. But what is the real picture here? We take a look in the following section.
About the pros
- Discounts on offer
The most obvious advantage of a store credit card is the discounts on offer. Retailers provide discounts on purchases using the store credit cards periodically. Yes, these discounts are on offer so that you apply for the card in the first place, but sometimes these cash-slash offers are quite substantial. However, terms and conditions concerning specific products and retail outlets apply.
- Free the other lines of credit
It is not just about the store credit card. If you are into online shopping and the use of plastic money, then you will have other lines of credit as well. Using a retail store credit card will enable you to free up your primary lines of credit for more important purchases. Keep your credit lines clutter free and enjoy your purchases without having to worry about the accumulation of debt.
- Associated perks
Finally, to top it all off, there are associated perks as well as far as using store credit cards are concerned. So, you can see it’s not only the discounts but the rewards as well. Reward points and cash-back offers on future purchases make life easy while buying in bulk. Keep in mind you can use your reward points the same way you use a credit card. Free merchandise or gift certificates, you name it, it’s all there.
About the cons
Okay, here is the math part of the equation. Sure, you can save money with the available discount, but you are likely to pay the amount of the discount back as interest accrued. Keep in mind that most of these retailer credit cards carry a very rate of interest for every purchase. So make it a habit of paying off the minimum at the end of every month to avoid the debt trap.
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The second problem for these credit cards the low spending limit on them. However, this is a problem only if you have a larger income and can afford the high rates of interest. It is all about the spending power of the customer. Low spending limits are especially ill-suited in case you are planning to buy in bulk. When this happens, there are two options available for you; you can either cover the expense with cash-in-hand or use another line of credit for making the purchases.
Keep the pros and cons in mind before applying for a retail store credit card.