Department Store Credit Card
Applicants for a department store credit card usually fall in one of four categories. The applicant is: 1) a young adult who is establishing creditworthiness for the first time; 2) someone who has a bad credit history due to late payments, non-payments, and perhaps even bankruptcy; 3) a frequent shopper of a particular retail chain; 4) someone who wants to take advantage of a special promotion the company is offering. This type of card allows the cardholder to charge for the purchases that are made at either a retail location or the company's website. It cannot be used for purchases from other companies like one of the well-known cards, such as Visa or Mastercard, that are accepted at multiple retailers. Generally speaking, a credit card from a department store or other retail company is easier to obtain than one of the more popular cards. As long as the applicant can show steady employment and some stability, the application is usually approved. Thus, an individual who is either establishing or re-establishing his creditworthiness may find it easier to be approved for a department store credit card than for general revolving accounts. But the easy approval benefit comes with a downside the interest rate is usually high for unpaid balances.
Someone who favors a particular retailer may want to open an account for either convenience or to participate in any reward programs that the retailer is offering. For example, a person who has bought a fixer-upper house may find it convenient to obtain a revolving line of credit for a major home improvement retailer. This way, the person can track expenses. Or a shopper may love the fashions of a specific clothing retailer. Having that retailer's department store credit card means the shopper receives email notifications of special sales and discounts before they are advertised to the general public. The cardholder may also receive reward points or extra coupons that aren't available to other shoppers. Sometimes a retailer may offer a special financing plan for a major purchase. This may be the incentive for a person to apply for the retailer's credit card. Let's say, for example, that an individual purchases a laptop from a major electronics chain. The chain is offering a zero-percent financing promotion for twelve months. The customer may apply for the offer to spread out the payments for the laptop instead of taking the lump sum out of her savings account or charging the purchase to another lender that will charge interest on unpaid balances.
Except for such special promotions, the interest rate on a department store credit card is usually well over ten percent, and may be over twenty percent, on unpaid balances. Cardholders should be careful to only make purchases that can be paid for before the account's due date. If paying by check, the cardholder should mail the check a week to ten days before the due date to ensure it arrives on time. When making online payments, the cardholder should be sure the payment is scheduled at least two to three days before the due date. A better practice may be to write the check or make the payment within a day or two of using the card. Paying off balances in full every month shows responsible financial behavior and saves money in financing costs. The cardholder who is trying to establish or re-establish creditworthiness should look through the fine print to be sure that the payment history is reported to the three major credit-reporting agencies, namely, Equifax, Experian, and TransUnion. If this information isn't in the terms and agreement contract for the account, the individual should call the lender. There is no need to have a department store credit card from a lender that doesn't report this relevant information.
The writer of Proverbs, most likely the wise King Solomon, wrote: "Whoso keepeth the law is a wise son: but he that is a companion of riotous men shameth his father. He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor" (Proverbs 28:7-8). Usury means high interest rates. The passage is cautioning against charging others high interest rate on borrowed money, but should also be seen as a caution against borrowing at high interest rates. This can be a financial trap that's difficult to escape and cause economic difficulties for a person or a family. So while being approved for a department store credit card can help an individual establish or re-establish creditworthiness, the account should be used sparingly and with good judgment. Purchases shouldn't be made if the balance cannot be paid off right away this cannot be said often enough. Once creditworthiness is established, the individual may wish to apply for a well-known card that will be accepted at multiple retailers. However, even if the interest rate is much lower, the same caution applies. Charges should not be made unless the balance can be paid off in full every single month. This can take diligence and discipline, but these good money habits are the path that leads to financial security.
Similarly, a department store credit card can provide shoppers with convenience, advance notice of sales, special discounts, reward points, and favorable financing plans. But even though these cardholders may have an excellent FICO score, they still need to be careful that balances are paid off each month. Those who are participating in a promotional financing plan, such as the zero percent interest for twelve months example given above, need to carefully follow the contract's terms and agreements. A payment that is even one day late usually triggers interest being added from the date of the purchase. These participants need to be sure that each payment is made on a timely basis. Many people would be well advised to close accounts once the purpose for opening it has been achieved. In that circumstance, the laptop purchaser can close the department store credit card from the electronics retailer after making the final payment.
Someone who favors a particular retailer may want to open an account for either convenience or to participate in any reward programs that the retailer is offering. For example, a person who has bought a fixer-upper house may find it convenient to obtain a revolving line of credit for a major home improvement retailer. This way, the person can track expenses. Or a shopper may love the fashions of a specific clothing retailer. Having that retailer's department store credit card means the shopper receives email notifications of special sales and discounts before they are advertised to the general public. The cardholder may also receive reward points or extra coupons that aren't available to other shoppers. Sometimes a retailer may offer a special financing plan for a major purchase. This may be the incentive for a person to apply for the retailer's credit card. Let's say, for example, that an individual purchases a laptop from a major electronics chain. The chain is offering a zero-percent financing promotion for twelve months. The customer may apply for the offer to spread out the payments for the laptop instead of taking the lump sum out of her savings account or charging the purchase to another lender that will charge interest on unpaid balances.
Except for such special promotions, the interest rate on a department store credit card is usually well over ten percent, and may be over twenty percent, on unpaid balances. Cardholders should be careful to only make purchases that can be paid for before the account's due date. If paying by check, the cardholder should mail the check a week to ten days before the due date to ensure it arrives on time. When making online payments, the cardholder should be sure the payment is scheduled at least two to three days before the due date. A better practice may be to write the check or make the payment within a day or two of using the card. Paying off balances in full every month shows responsible financial behavior and saves money in financing costs. The cardholder who is trying to establish or re-establish creditworthiness should look through the fine print to be sure that the payment history is reported to the three major credit-reporting agencies, namely, Equifax, Experian, and TransUnion. If this information isn't in the terms and agreement contract for the account, the individual should call the lender. There is no need to have a department store credit card from a lender that doesn't report this relevant information.
The writer of Proverbs, most likely the wise King Solomon, wrote: "Whoso keepeth the law is a wise son: but he that is a companion of riotous men shameth his father. He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor" (Proverbs 28:7-8). Usury means high interest rates. The passage is cautioning against charging others high interest rate on borrowed money, but should also be seen as a caution against borrowing at high interest rates. This can be a financial trap that's difficult to escape and cause economic difficulties for a person or a family. So while being approved for a department store credit card can help an individual establish or re-establish creditworthiness, the account should be used sparingly and with good judgment. Purchases shouldn't be made if the balance cannot be paid off right away this cannot be said often enough. Once creditworthiness is established, the individual may wish to apply for a well-known card that will be accepted at multiple retailers. However, even if the interest rate is much lower, the same caution applies. Charges should not be made unless the balance can be paid off in full every single month. This can take diligence and discipline, but these good money habits are the path that leads to financial security.
Similarly, a department store credit card can provide shoppers with convenience, advance notice of sales, special discounts, reward points, and favorable financing plans. But even though these cardholders may have an excellent FICO score, they still need to be careful that balances are paid off each month. Those who are participating in a promotional financing plan, such as the zero percent interest for twelve months example given above, need to carefully follow the contract's terms and agreements. A payment that is even one day late usually triggers interest being added from the date of the purchase. These participants need to be sure that each payment is made on a timely basis. Many people would be well advised to close accounts once the purpose for opening it has been achieved. In that circumstance, the laptop purchaser can close the department store credit card from the electronics retailer after making the final payment.
Department Store Credit Card
![]()
Reviewed by Anonymous
on
3:51 PM
Rating:
