A credit card from a department store can be a good option for some consumers. These cards have some limitations. Some of the limitations include: Interest-free financing, Cash-back rewards, and co-branding. Make sure you read all the terms and condition before applying for a departmental store credit card.
Limitations of a department store credit card
The loyalty program of a department store credit cards offers many benefits to customers. These cards are well worth the investment as you often receive big discounts or promotional interest rates. However, if you don't plan on making frequent purchases from the same store, a general rewards or low interest credit card may be a better choice.
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. In some cases you may be required to pay high fees and interest rates. This can be a disadvantage for people with bad credit histories.
Cash-back incentives
Shoppers can earn valuable rewards with a department store credit cards. These purchases may not always be made as often as other types, but they add up over hundreds of dollars each year in cashback. A variety of rewards options are available, from rewards on everyday spending to special store discounts.
Be sure to understand your spending habits before you apply for a cash back rewards card. This will help you determine which card is right for you. Different cards offer different categories. Plan your purchases around the rotating categories. You should also be aware of the eligibility and deadlines for each type reward.
Financing without interest
A store credit card is a great way to stick to your budget and not go overboard. Paying your bills on time is a must, as high interest rates are likely to follow. You may want to avoid this problem by paying off your balance before the interest-free period expires.
Store cards may have special financing terms that eliminate interest for a set period. The interest-free period (also known as "deferred in interest") applies only to the balances paid within a set period. The interest will become retroactively due to expire the promotional period. In contrast to 0%-APR credit card for general-purpose purchases, they don't typically 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 as "open loop" credit cards, are issued by companies that have partnerships with networks such as MasterCard, Visa, and American Express. These cards have higher credit standards and can be used to purchase at other locations than the store. However, they also have some limitations.
It's a great way reward yourself for all your purchases. Earn points that can be used to receive a discount at your favorite stores. They may even be able to give you substantial travel discounts. These co-branded card have their limitations.