Avoid Department Store Credit Cards

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Tue, Mar 31 - 9:35 am EDT | 5 years ago by
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cardsphoto1I didn’t think of it much when, the other day at Kohl’s, I was asked if I wanted to save 15% on my purchase. It happens so regularly. But I read a post from Bible Money Matters today about the increasing aggressiveness of department store credit card sales attempts, and I started replaying that conversation in my head:

“Would you like to 15% today?”

“Uh, no thanks.”

“It’s 15%!”

“Thanks, that’s okay.”

It was pretty apparent that she was trying. Normally I only have to say “no” once. At any rate, I didn’t bite. Save 15% on an order of $30? That’s $4.50. Besides, I’m the Kohl’s email list. I get 15% and 20% offers all the time. I don’t need a credit card to save that money. Anyway, here are the reasons that giving in to department store credit cards may not be the best plan:

  1. Your credit will be checked. That means a ding against you and a possibly lower interest rate. If you apply for multpile department store credit cards, you will see an even bigger impact.
  2. Department store credit cards aren’t as “favorable” as major bank cards. A Kohl’s or Target charge card just doesn’t look as good or factor as favorably as a card from Capital One or Bank of America.
  3. Do you really want to give out personal information in line? Bible Money Matters makes this point — and it’s a good one. Do you want to give your Social Security Number and other information in a public place?

Department store credit cards also normally charge higher rates of interest and do not have rewards programs. Essentially, you are using such a credit card to get a one-off savings. It might be worth it if you are getting something big, but I’d rather use my cash back rewards card for something that big and then pay off the balance the next month.

How do you feel about department store credit cards?

image source: Kohl’s Web site

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  • Jim

    Don’t have them, don’t want them. I believe some stores, such as Kohls, actually rewards their salespeople for signing up new credit card customers.

  • Miranda Marquit

    It’s quite possible that they are getting a kick back for sign ups. It gives them the incentive to try harder…

  • http://www.biblemoneymatters.com Bible Money Matters

    It sure would explain why the salespeople were being so aggressive for me – actually wandering the store asking people to sign up as they shopped! Not even waiting til I got to the checkout..!

  • http://mrsmicah.com Mrs. Micah

    Yep, I avoid them like the plague. I once considered getting a Joann’s card because I love to buy fabric. But then I realized that I probably spend less than $200/year there. Some years I spend less than $100, as I get gift cards and have leftover fabric (or gifts of fabric). I could see having one if I had a large crafting budget, or having a store card if I used it regularly for some reason.

    But there’s no way I’m going to sign up at a store just to get than one-time 15% discount. It would have to be a carefully considered decision.

  • Miranda Marquit

    I think you make a good point about analyzing how much you spend in one place, and considering whether or not it’s worth it. I think your point about getting gift cards is a good one as well. With so many people offering gift cards to stores that we like, a credit card really isn’t necessary. Why pay interest when you can just get the stuff for free?