Store Credit Card Tricks You Must know


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Store Credit Card Tricks

Store Credit Card tricks: Credit card tricks stores do that you must know about.

Store credit cards might help you build your credit or even get you a discount on at the store who issued the credit card.

These cards come with big risks. Some convince you to spend more than you planned then hit you with you high-interest rate charges. These store credit cards can cost you dearly.

They need to be used with your eyes wide open. Knowing about these risks  that I’ll explain can help you make an informed decision and possibly show you how to use store credit cards and have them work for you.


If you  shop in malls, then you can remember being offered a store credit card.

Store credit cards are a tempting. Some retailers promise you gift cards — sometimes enough to cover your entire purchase or a big discount all just for you signing up for their store credit card immediately.

Remember it’s not a good idea to sign up for any new credit card without reading the fine print and taking time to consider the impact the new credit account could have on your finances. Store Credit Cards can be especially risky so watch out for their numerous risks.

With this in mind, we’ve put together a list of some of the most-common risks found to be associated with store credit cards, along with advice on how to not fall into any of the store card traps.


Store Credit Card Tricks 1: You’ll get high interest rate cards

Due to the high rates, the more you spend, the more difficult it will be to pay your full balance every month.

Carrying a balance store credit card is often more expensive than if you had carried a carrying on a credit card.

According to  the Federal Reserve, the average interest rate for credit cards at the end of 2018 was 14.73% and on retail store credit cards, it’s common to see rates in the 20% and above.

Here are some examples.

    • Best Buy® Visa® Card charges a variable 27.49% purchase APR.
    • The Pottery Barn Credit Card charges a whopping variable 28.99% on purchases.
    • Macy’s Card charges is a variable 27.49% APR on purchases.

Due to their extremely high interest rates, store credit cards can be alot more dangerous than regular credit cards if you carry a balance.

You can avoid paying any interest if you pay off your balance on time and in full each month.


Store Credit Card Risk 2: You can’t make your minimum payment on time

If all else fails, you should always try to make your minimum payments by their due dates.

One of the things more frustrating than a high-interest credit card is making your payments and still having to pay late fees and or a penalty APRs because you didn’t pay quite enough, or you missed your payments due date.

Many store credit card issuers treat less-than-minimum payments and late payments the same. Even if you pay some of your minimum payment, Gap will charge you a late fee that costs you up to $38. Worse yet,  My Best Buy® Visa® Card a less-than-minimum payment would send your account into default.

Costco Anywhere Visa® Card by Citi hits you with a penalty APR of up to 29.99% and a $39 late-payment fee.


Store Credit Card Tricks 3: You make purchases just to take advantage of rewards

Store cards and deferred interest cards can bring out the shopaholic in most people.

Some get tempted to spend more than they can afford. Store cards also have special promotions and rewards that can entice you to go spend more than your budget and buy things that you don’t need.

Those promotions may be exclusive discounts or gift cards that can only be earned by spending a certain amounts.

Examples, The Macy’s Card features a 20% discount (up to $100 savings) on purchases you made during the first two days after approval.

JCPenney Credit Card offers savings of 15% on the same day you’re approved for their store card.

These schemes seem nice but, how much are you saving if you’re actually spending more?


Store Credit Card Tricks 4: You use a card’s ‘deferred interest.’ feature

Many retailers have offers with 0% interest to help customers spread out their payment for on new or large purchases.

Here’s the catch.

If you don’t pay off your full balance from the offer by the time the special-financing period ends, you might be charged interest not only on the remaining balance, but on the entire amount of interest you would have paid during the plan.

These bait-and-switch promotional APRs are known as “deferred interest” offers. These offers are how many store cards trick you into paying more.

Read more: What is deferred interest?

Take a look at the My Best Buy® Visa® Card. It offers deferred interest on certain purchases for six months or more. But if you fail to pay it off in time, you’ll be hit with a retroactive 27.49% APR on the entire initial balance.

Best Buy isn’t the only retailer doing this tricky tactic. It’s common with the majority of store credit cards. Some Other store credit cards with similar deferred interest scheme clauses for their credit cards are Lowe’s, Pottery Barn, Amazon, Walmart & Home Depot.


Store Credit Card Tricks 5: You’ll get issued low limit credit cards 

A store card may offer you a lower credit limit than you’d receive from other credit cards.

If you carry a balance, a lower credit limit will increase your credit utilization ratio, which in turn could hurt your credit. While you often won’t be allowed to make purchases that send you over your limit, it is possible for the bank to approve a purchase that sends you over it. And if you spend more than you’re allowed to, your card could be sent hurtling into default.


Store Credit Card Tricks 6: You might be tempted and apply for too many cards

You might apply for too many credit cards since store cards usually have no annual fees, this might tempt you to apply for a new store credit card every time a store that offers you one.

Applying for multiple credit cards in a too short a period of time will hurt your credit. That’s because new accounts and each card application will trigger a hard inquiry on your credit file and multiple hard inquires lower credit scores and also make you look like a risky borrower.

Hard and soft credit inquiries:

It’s best to spread out credit card applications over a period of time.


How you can avoid store credit card tricks

  1. Set up auto pay. So you don’t forget to pay your credit card bill on time. Set up auto pay. One late payment (or less than the minimum payment) can often lead to expensive fees and penalty APRs.
  2. Pay your balances in full each month. Whether you’re taking advantage of deferred interest offers or facing a high APR from the get-go, carrying a balance month after month is expensive and Store cards generally have higher than interest rates then regular credit cards.
  3. Stick to your budget. Set your budget when you go shopping this should help you avoid spending more than you can afford.