The Story on Store Credit Cards
Reader Marc R. from McLean warns shoppers to be leery of the store promotions that offer an immediate 10 percent discount to shoppers who sign up for a store credit card on the spot.
Looking for savings, Marc naturally took advantage of such an offer from Macy's. But a few weeks later, he was surprised when he received a store-branded Visa card--not a private-label card that could only be used at the store--with a $10,000 line of credit. Since he had more credit cards than he needed, including one from Visa, he called to cancel and get what he wanted in the first place--a more limited store card.
Macy's said it makes it clear in the credit application that the store will first consider you for a Macy's Visa card and that's what you'll get unless you don't qualify for it or you opt out at the cash register when you sign up for the card. But the credit card application is so full of fine print that you may not spot that caveat even if it is in bold capitalized letters. And in the haste to sign up for the discount, you also may not realize that you have a choice of a Macy's Visa card or a more limited store card.
What difference does it make? As Marc points out, every new credit card you get is posted on your credit report, along with the available credit line, whether you use the credit or not. If you are in a lower- or middle-income bracket, at some point lenders will become concerned that you have too much available credit. And too much available credit could reduce your credit score--leading to higher interest rates, not just on new loans but also on existing credit card debt. Plus, you could be denied credit. That all means a Visa card with a higher credit limit may not necessarily be what you want. It all depends on your financial situation.
As Marc R. says, "There is indeed too much of a good thing."
Please email us to report offensive comments.
Posted by: Susan W. | January 6, 2006 11:35 AM
Posted by: Naomi | January 6, 2006 1:22 PM
Posted by: Mary | January 6, 2006 1:26 PM
Posted by: max | January 6, 2006 3:01 PM
Posted by: Margie | January 6, 2006 4:02 PM
Posted by: Susan W. | January 6, 2006 4:25 PM
Posted by: Christa | January 6, 2006 4:37 PM
Posted by: Anonymous | January 6, 2006 5:21 PM
Posted by: Patrick J. | January 6, 2006 6:58 PM
Posted by: Patrick J. | January 6, 2006 7:18 PM
Posted by: Credit scorer | January 6, 2006 7:33 PM
Posted by: Buckshot | January 7, 2006 11:12 AM
Posted by: Insider | April 16, 2006 6:04 PM
Posted by: Paul | September 14, 2006 12:58 PM
The comments to this entry are closed.