Store Credit Cards Info

I was just sent this piece/press release by someone at Consumer Reports on the best and worst store credit cards. I thought it made a good follow-up to our store credit card discussion earlier this morning. Personally, I have my own list of favorite credit cards (non-store cards), but some of you may see something below that you like.

ShopSmart Investigates 17 Retailers’ Credit Card Programs

“Would You Like to Apply For a Store Credit Card and Receive 15% Off Your Purchase Today?”

YONKERS, NY – After you plop an armload of goodies at the register, what usually comes next is the pitch to save 10 or 15 percent on your purchase if you apply for the store’s credit card. According to a report featured in the July 2008 issue of ShopSmart, from the publisher of Consumer Reports, consumers should read the fine print before signing up. After decoding 17 retailers’ credit card programs, ShopSmart found big differences—some cards included bonuses like cash-back rebates while others had high interest rates and no rewards programs at all.

“The promise to save immediately when you open a store credit card account is tempting, but big interest payments can easily exceed rewards,” said Lisa Lee Freeman, editor-in-chief, ShopSmart. “Store credit cards make sense only if you pay off your bill each month and only when the program fits your individual spending habits.”

Best for Cash Back. Costco and Wal-Mart give the option of a cash-back reward to be spent wherever you want, and neither caps the amount that can be earned.

• Costco American Express. APR: 15.99%. Earn 1% on every dollar spent at Costco or other retailers, 2% on airline, hotel charges, rental cars and cruises, and 3% on restaurants and gas stations.
• Wal-Mart Discover Card. APR: 11.87% to 20.87%. The cash rebate is based on 0.25% to 1% of every dollar you spend, with the rebates increasing the more you spend.

Best for Loyal Customers. If you love these stores and shop in them frequently, their cards give decent rewards, mostly as gift certificates or discount coupons, and they generally let you shop in-store or online.

• Ann Taylor Visa. APR: 12.24% to 16.24%. Earn 4% on every dollar spent at Ann Taylor locations and anntaylor.com, and 1% spent elsewhere.
• Barnes & Noble MasterCard. APR: 15.74% to 21.24%. Get 5% back on most store items, plus one point for each dollar charged elsewhere. 2,500 points earn a $25 gift certificate.
• Bloomingdale’s Visa. APR: 22.9%. You get a 3% reward for every dollar spent in the store and 1% for purchases made elsewhere. Requires $1,000 in Bloomie’s purchases annually.
• Macy’s Visa. APR: 22.9%. Get up to a 3% reward for every dollar spent at Macy’s, and 1% on purchases elsewhere, good toward gift certificates after you spend $500.
• Target Visa. APR: 12.74% to 21.74%. You earn one point per dollar spent at Target and one point per $2 spent elsewhere; 1,000 points earn you 10% off one day of purchases.

Best for Racking Up Points Fast. These retailers offer rewards in conjunction with other stores, so you can build your reward point total more quickly.

• A.J. Wright, Home Goods, Marshalls, TJMaxx MasterCard. APR: 11.24% to 20.24%. Get five points for every dollar spent at the four retailers, plus one point for each dollar spent elsewhere. For every 1,000 points you get a $10 gift certificate.
• Banana Republic, Gap, Old Navy, Piperlime Visa. APR: 21% Earn five points for in-store sales, one point for purchases elsewhere, and rack up $10 gift certificates for every 1,000 points. Special sales and free alterations when you spend $800 in a year.
• Expo Design Center, Home Depot MasterCard. APR: 13.24% to 19.24%. Get three points for every dollar spent in stores; two for every dollar at gas stations, restaurants, grocery, and drug stores; one for every dollar spent elsewhere. Points can be redeemed for Home Depot gift cards, dining and entertainment, or travel.
• Kmart, Sears MasterCard. APR: 23.15%. Earn one point per dollar spent; every 2,500 points earns you a $25 gift card.

Best for Big Spenders. The high-end stores below offer more lavish rewards. But only big-spenders get the coolest perks, such as a three-night stay in Prague from Neiman Marcus for 1,000,000 points.

• Bergdorf Goodman, Neiman Marcus. APR: 22.25%. Earn one point per dollar spent at either store. You need at least 5,000 points to receive benefits. Rewards include points toward air travel. At the 10,000 point level, you can get a $250 gift card. At 100,000 points, you get a trip to Canyon Ranch spa or a $2,500 gift card.
• Nordstrom Visa. APR: 6% to 20.9%. Earn two points for every dollar you spend at Nordstrom and one point for purchases elsewhere. Every 2,000 points earns a $20 Nordstrom certificate. If you spend over $2,000 annually, you get free shipping and access to private sales. More than $10,000 in annual spending earns free concierge services and basic alterations.
• Saks Fifth Avenue MasterCard. APR: 21.9%. Earn two points per dollar spent in Saks stores or online up to the first $5,000 annually, four points for every dollar up to $10,000, then six points for every dollar above $10,000. You can earn one point per dollar spent at other retailers. And 2,000 points earns you a $20 gift card, free shipping, and advance notice of sales. You can also get discounts on vacations.

Skip These. Abercrombie & Fitch (APR: 24.8%), Crate & Barrel (APR: 19.8%), and Lowe’s (APR: 21.99%) offer no rewards program. Pay for purchases at these stores with another rewards card.

Store Card Dos and Don’ts

• DO be selective. Signing up for too many cards might hurt your credit score.
• DON’T register for any card program before you see what it offers.
• DO read your statements carefully for mistakes, changes in the program and discount coupons.
• DON’T miss payments or pay late. In addition to hitting you with high late fees and finance charges, many stores will set your reward clock to zero.

Comments

[Shane]

I've often been tempted to take these offers in order to save some cash on an initial first purchase. I'd like to sign up, get the 15% off, then cancel it a month later. Does anyone know if doing this would negatively affect my credit?

[kitty]

" At 100,000 points, you get a trip to Canyon Ranch spa or a $2,500 gift card. "
This is off-topic, but I stayed at Canyon Ranch spa in Lenox, Ma in Berkshires once. It was in fall of 1990, and it didn't cost me a penny. Won a three night stay for two in a raffle held in a local health club. The stay included a large room with two full beds, all meals, tips, use of facilities and those of the activities that didn't carry additional cost (e.g. exercise classes or hiking but not massage). Lenox is about 3 hours drive from where I live, so I invited a friend and we drove there. We didn't buy any additional activities as they seemed overpriced - I guess we are cheap, but the prices seemed too ridiculous. So we didn't spend any additional money except for gas and coffee at a cafe in Lenox (Canyon Ranch didn't consider coffee a healthy drink, so the coffee they served there after breakfast was pretty terrible). All in all it was an interesting experience - beautiful grounds and the surrounding area, good food, two swimming pools, fantastic service. It's not something I'd pay that much money for, but it was definitely worth the price I paid :-)