Some consumers may find a credit card at a department store a great option. But, this type of card comes with a few limitations. These limitations include co-branding, cash-back rewards, interest-free financing and cash-back. Make sure you read all the terms and condition before applying for a departmental store credit card.
Limitations on a department-store credit card
Many benefits are available to loyal customers with a department-store credit card. These cards are a great option because you can often get big discounts and promotional interest rates. A general rewards credit card or low-interest credit card might be better if you don’t plan to make frequent purchases at the same store.
These cards come with limitations that may be unfamiliar to young consumers. It is possible that you will not be able or able to make your payments on time. You might have to pay fees and high interest rates in certain cases. For those with poor credit histories, this may be a disadvantage.
Cash-back Rewards
A department store creditcard offers shoppers the opportunity to collect valuable rewards on all purchases made in the store. Although these purchases may not be as frequent than other types of purchases they can still earn hundreds of dollars annually in cash back. There are many options for rewards, including discounts at stores and rewards for everyday purchases.
Know your spending habits and make an application for a cashback rewards card. This will help to determine the card that is best for you. Different cards come with different categories. Make sure you plan your purchases around those rotating categories. Make sure to know the eligibility dates and deadlines for each type.
Interest-free financing
A store credit can help you stay within your financial budget and prevent you from going overboard. If you fail to make your payments on the due date, high interest rates can quickly add up. You may want to avoid this problem by paying off your balance before the interest-free period expires.
Special financing terms are available for store cards that allow you to waive interest for a certain period. This is sometimes called "deferred Interest" and it applies to balances that are paid within a specified time period. Retroactive interest will be added after the promotional period has expired. In contrast, 0%-APR credit cards for general-purpose purchases typically do not charge retroactive interest.
Limitations on co-branded Cards
The co-branded departmental store credit cards let you shop wherever the store's name appears on the card. These cards, also known to be "open-loop" credit cards, can be issued by companies with partnerships with networks such a MasterCard, Visa, or American Express. These cards can be used at more than one store and have higher credit standards. These cards have their limitations.
It's a great way reward yourself for all your purchases. You can accumulate points that you can use to get a discount at your favourite retailers. These points can also be used to get significant discounts at your favorite retailers. These co-branded card have their limitations.