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Department Store Credit Cards
Written by: Bill Matthews
Today, more and more well known department store credit cards are offering attractive incentives and rewards in the form of cash back and savings discounts to those who regularly patronize their establishments.
Consider the APR
An important point to remember with many department store credit cards is that rewards, perks, and discounts shouldn't come at a price of high interest rates or hefty fees. With some cards, interest rates may range from 15% to as high as over 20%. Also, at some of the higher priced shops and stores, cardholders must spend a minimum amount, sometimes as high as $1,000 annually before you begin to accrue any rewards.
Department Store Rewards Cards
With other department store credit cards, just a percentage of your purchases go toward earning rewards rather than the total amount spent. Although some of these merchants may feature benefits such as double reward offers from time to time, even triple, while others have deals that only pertain to customers who carry a set minimum balance on their cards.
Exclusive Offers
Another perk of department store credit cards is that most send mailings to account holders notifying them in advance of special sales and discounts. Regardless of the retailer, the main goal of rewards and incentive programs is to entice customers into spending more. However, if you plan on shopping there anyway, you might as well make sure you're getting the most for your money.
Avoid the Extra Fees
The key to managing department store credit cards is to take advantage of the savings, but without losing out over the long term by paying extra fees. Never buy something merely to earn rewards, and pay attention to those special sales and exclusive offers for cardholders. If possible, paying off your balance each and every month is also an excellent way to stay ahead of the game.
Co-Branded Credit Cards
Another type of department store credit cards that are gaining in popularity are referred to as co-branded cards, which may have lower interest rates than traditional cards issued by single retailers. Co-branded cards allow consumers to make purchases outside of the specific store and are accepted as a major credit card. A typical reward of this kind of card is 5% cash reward when you shop where the card was issued, and 1% anywhere else.
Even a 3% reward on total purchases requires $100 spent to earn $3, to build that up to $50, you'd have to spend over $1,600. Although by shopping during those double or triple reward events you'll cut that amount at least in half. Other department stores may offer special rewards or perks for purchases made at their web site as opposed to in the actual store.
Some of these cards also offer a low APR (annual percentage rate) for a fixed amount of time, usually six months, which then changes to a variable rate that's generally based on your credit rating. However, if you're late with a payment, interest rates are liable to rise considerably, and some stores may rescind reward offers for cardholders whose accounts are in arrears or over the limit.
Depending on the type of card and the issuer's policies, some cash rewards are given in the form of gift certificates redeemable for future purchases, usually in increments of $10 to $25, while others issue checks that are mailed on a set basis.
