Department store credit cards can offer some good values and discounts. While universal cards such as MasterCard and Visa have eclipsed store cards in usage in recent years and can be used at more places around the world, the old fashioned store cards still packs a punch with some financially lucrative benefits. Basically all stores are accepting credit cards online, so you can get these deals in store or online.
Many department store credit cardstoday offer you discounts for using them. Target and Lowes, just to name two, offer 5% off on every purchase that you make using your card – what a deal! This can make store cards a great option if there is a store or two where you shop regularly. If you are going to spend the money anyway why not get a discount? Why do the stores do this? To encourage your loyalty, of course. If you know you get 5% at Lowes with your card you are that much less likely to shop at Home Depot. If you get 5% off at Target you are that much less likely to shop at Walmart.
Once you have a credit card the store probably has your mailing address and your email. And they will use it. You can count on getting coupon after coupon. And sometimes, some really good deals. Sure, it can just be junk mail, but if it’s a store that you shop at a lot these coupons can be like money in your pocket. Of course, if you like coupons be sure to always do an online search for a coupon before you buy something, online or in the store. You would be amazed at how easy it is to find great coupons online, but we digress.
Many department store credit cards companies give you access to special sales and additional sale discounts if you are a credit card holder. Kohl’s department store, for example, is famous for offering 10-25% additional savings, even on sale prices, to Kohl’s card holders. You can really save money there. If you see a shirt you love for $50, and it’s on sale 25% off, then you get another 25% off for being a card holder you’ll pay just over $25 for that shirt. Wow! Other stores have similar practices.
Despite their benefits, U.S. News & World Report cautions you to use store credit cards wisely. They warn that you should maintain your usual spending habits, that is, don’t spend more money on clothing just because you have a Macy’s or Express card. But they also say that these cards can be good financial tools as they let you track your spending, so you will know how much gas you buy each month on your Shell card or how much you are spending on your wife at Victoria’s Secret.
So, store cards have some real merits. If you wonder how to use credit card effectively, this can be your answer as it helps limit the damage you can do. But their biggest drawback is simply their limited range. A store card is only good at that one store, or maybe a family of stores. But you can’t use your JC Penney card at Target or your Target card at your favorite restaurant. You have to consider if a store card meets your needs or if a universal card is better. By the way, both will have the same impact on your credit score.
U.S. News & World Report. http://money.usnews.com/money/blogs/my-money/2014/02/06/4-smart-ways-to-use-retail-store-credit-cards
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