How To Win the Retail Credit Card Game

How would you like to get a 15 percent rebate on your purchase today? Why not? But hold on before saying ‘yes,’ there may be some pitfalls on this way. With the average retail credit card APR at more than 23 percent, the savings from store discounts might get wiped out with any interest you accrue.

retail-store-aprWhether we’re searching online for a coupon to save $1 on a box of cereal, getting a loyalty card punched to creep closer to that free 6-inch sub or calling a credit card issuer to get a late payment waived, we’re constantly looking for ways to keep some extra money in our pockets.

However, all deals are not created equal. Take store credit cards, for example.

Undoubtedly, you’ve had some clerk at some store offer you one of these cards, with a pitch that sounds something like this: “Would you like to save 15 percent off your purchase today by signing up for our new credit card?”

About 99 percent of the time, you reflexively say, “No, thanks. I’m good.” But then there are those other times. Maybe you’re spending a lot of money on clothes in preparation for a new job or for your kids’ new school year. Perhaps you’re loading up on lumber, paint and tools for that do-it-yourself project for your house. Or maybe you’ve finally upgraded that old TV for a state-of-the-art new one to hang on the wall in your living room.

That’s when that 15 percent discount can be really appealing – and understandably so. Saving 15 percent off a $500 trip to Home Depot means real money in your pocket.

It’s not that simple, though. For one, these cards typically come with seriously high interest rates. (A recent survey put the average retail card APR at more than 23 percent.) Also, you often aren’t given much time to decide if you want to sign up for the card. After all, who wants to take five minutes at the counter to read a credit card’s terms and conditions? Plus, there’s probably a line of people waiting in line behind you, and the longer you take, the grumpier they’re likely to be.