Hey you! Yeah, you, with the credit cards. Remember when you were shopping at the mall the other day and the cashier asked you, “Do you have a _____ credit card?” And you said no?
Remember how she then proceeded to say that you save 15% of today’s purchase if you open an account and charge your card? So you did. You were “instantly approved.” Who doesn’t wanna save 15%, right?
Remember how you signed the little payment terminal with that stupid plastic pen? You could hardly read what it said because the words were so small and the quality sucked. But you had to sign to get the 15% off and the credit card.
Why don’t you go sign in and check out your last statement on that Dillards or Sears credit card. Tell me what the APR is.
Don’t worry, I’ll wait.
So, what’d you think? High? Low? More than likely, it’s unreasonably high. Store credit cards often carry higher interest rates than regular credit cards. So don’t be surprised when that $100 purchase carries over to the next month and becomes a $125 purchase.
Now, store credit cards aren’t always bad. If you’re particularly loyal to a specific store, and the rewards for that card are decent, then it might be worth having. But if the APR is upwards of 20%, it’s best not to let that balance roll over. Buy what you can afford and pay it off as soon as humanely possible. Some stores let you pay your card purchase right there in store, which is an awesome perk.
Say you’re not particularly loyal to one store, but you want a credit card to build some credit. Apply for a low interest credit card at your local credit union. FTWCCU has interest rates as low as 9.9% APR. Now, THAT’S spot on. Use your card everywhere VISA or Mastercard is accepted, and pay it off as you make the money.
Emergencies arise every day, say you have a flat tire or hurt yourself at work. Credit cards are one way many Americans manage to stay above water in tough times. But the last thing you want to do is pay another huge chunk of your purchase because you applied for the wrong card. Think smart.
This blog was written by FTWCCU Marketing/Digital Commerce Assistant, Sammie Arriola.