Store Credit Cards and What You Should Be Aware Of

While you were doing your Christmas shopping last month did you give in to the lure of the sales clerk offering you the opportunity to “Save 15% today and have no interest payments for 18 months if you open a credit card account with us?” This probably sounded great while you were reflecting on the amount of money you were spending during the holiday season.

But…. before you get too deep into thinking you have a year and a half to pay off that purchase amount that is very likely much more than if you had opted for cash or debit card, there are some things that you need to be aware of. Private-labels cards, or store -brand cards offer benefits that can be valuable if you know how to use them, but there some things that you must be aware of when utilizing these time sensitive offers.

Be sure to sit down before your first payment comes due and read the fine print. Some retailers offer promotions where you do not pay interest for a certain period, as long as you pay off the balance by the time the promotional period ends. But if you do not pay off the balance, you will owe interest on your average balance during the promotional period - but interest will accrue starting on the date you bought the item.

So if that Christmas purchase of a new flat screen television for your parents or a child cost you $1000 at the time of purchase and you manage to pay off $800 by the end of the promotional period, you will still owe interest (and a high rate of interest at that!) on your daily average balance dating back to the day you purchased that television.

Another thing you need to be aware of is exactly what date the promotion ends. At Sears, for instance, store credit card promotions begin the day you made your purchase. What this means to you is that if you purchased your television on December 24, 2009, the bill MUST be paid by the same date 12 months later. It doesn’t matter what the statement date is. What matters is the actual purchase date. Pay close attention to this date and mark it on your calendar so you can be sure to have this debt paid on or before the final due date.

**You have permission to reprint in your publication or to your website/blog any articles by Theodore Henderson found on this website as long as Theodore Henderson’s name and contact information is included. Theodore Henderson, Faith-Based Business Consultant and Author. http://thjassociates.com, henderson.theodore @ gmail.com.