Thanksgiving has become synonymous with shopping. Black Friday is expanding intoThanksgiving. Retailers are opening earlier and earlier on Thanksgiving Day. Retailers will entice you with what appears to be amazing deals. Every time you go to the store, a salesperson will try to get you to sign up for the store credit card. They will peak your interest by telling you no interest for 12 months on your balance. Or they will tell you that if you open a credit card today you get an additional 25% off your purchase. The idea of no interest payments and an additional 25% off seems almost too good to be true. Before you know it and without much thought, you leave the store with a bag load of goods and a new credit card.
The deals can be great to start, but if you are not careful that deal can turn into a money pitfall. Store branded credit cards are everywhere. Most large retailers will offer their own cards. And to entice you to sign up, they promote big discounts and tempting rewards. Buyer beware. If you regularly carry a balance on credit cards, retail credit cards are a bad idea. According to CreditCards.com, the average retailer’s credit card charges 23.4% compared to national credit cards with an interest rate of 15%. It can take you years to pay off the principal balance and acured interest rate charge fees. It can be a dangerous game. Also, if you miss one payment on a 0% interest credit card, you can lose the 0% interest rate deal. And than the retailer will apply an interest to the entire balance. Suddenly, you lose out on the initial savings that got you to sign up for the credit card in the first place. In the long run, you end up paying more for the item.
The last thing you should do, is get yourself in debt to try to get rewards. It isn’t worth it.