How many stores do you go in these days where either someone at the door is advertising an often difficult to refuse charge card offer or the checkout employee is marketing the store’s credit wares with instant savings off your purchase?

More Money Earned on Purchases

Department stores are as competitive these days as are credit card companies at selling their own lines of credit for their purchases. However, the savvy buyer—and there are a only a few—realizes that this is the store’s tactic to try to cash in even more on the purchases you are making right now.

There are many financial experts who suggest the department store credit card is a business tactic designed to secure your return business and in some cases it might be, but the stores stand to earn money just by getting you to put your balance on their card right now. Especially if you are making a large purchase, chances are you will not run home and write a check to the store paying off your balance. Carry that balance and the company will hit your account with interest rates in the ballpark of 21% month after month. In the end, what does that mean you have spent with them, on perhaps only one purchase?

Before you agree to the “10% savings today” pitch, make sure that you are aware of the interest rate your purchase is being compounded with. Does the 10% even make a difference, or will you in effect be paying even more for your purchases? Can you afford to make the purchase with a lower interest credit card, or better yet, your checking account or cash?

Are There Any Good Deals?

The good deals are made by those savvy credit consumers who take advantage of a significant special savings offer, know they have the money in the bank, have a significant purchase to make with the store and will promptly go home and pay off the balance, closing the account not long after. But, this is rare. And that is why the business of store credit cards continues to grow because consumers are notoriously corrupt with their credit habits.