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I Don't Understand Store-Issued Credit Cards..  
User currently offlineLASoctoberB6 From Japan, joined Nov 2006, 2380 posts, RR: 1
Posted (4 years 11 months 3 weeks 4 days 20 hours ago) and read 2782 times:

I need help understanding how the credit cards issued by major retailers (i.e. Best Buy, HSN, QVC, Sears...etc) work, and how one could use it for financing, and in this case, what that means. The whole bit of it rather confuses me.


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24 replies: All unread, jump to last
 
User currently offlineMWHCVT From United Kingdom, joined Oct 2008, 680 posts, RR: 0
Reply 1, posted (4 years 11 months 3 weeks 4 days 16 hours ago) and read 2729 times:

On the whole, store issued credit cards work in the exact same way as any other credit card issued by a bank, most are managed/underwritten by a major provided i.e. MBNA, Capitol One, CITI etc.

Often rates on these cards are higher than bank issued cards and have higher cost factors than bank credit cards, also as these are normal managed/underwritten it can make it harder to transfer balances from one card to another as, underwriters of one store card will not normally allow transfers from another under there management.

Diclaimer, I work in customer services for a UK credit card company, I know my companies T&C's inside out, I will not give the name of the company I work for. But will be happy to give what general advise I can

MWH@CVT



Must think up a new one soon, slow moving brain trying to get into gear ;)
User currently offlineLTBEWR From United States of America, joined Jan 2004, 13039 posts, RR: 12
Reply 2, posted (4 years 11 months 3 weeks 4 days 14 hours ago) and read 2696 times:

Store cerdit cards were some of the first credit cards and dominated until the 1970's when Master Card, Visa and others became to be broadly accepted as improved computer and communications technology made MC/Visa able to be used broadly. They were established to encourage more purchases at their store and not lose sales as people didn't have enough saved up cash.
They continue and in some ways have expanded in recent years as a way to encourage loyalty to a store, to make someone buy more there than from competitors and to expand the available credit to the customers. Store branded cards (this incudes cards actually under MC/Visa with the stores brand) often will have no annual fees, perhaps points/credits for purchases at the branded store and elsewhere, have joint promitions with MC/Visa to lower ad costs, may pay lower rates of merchant fees, offer special discounts to cardholders to encourage them to shop there and so on.


User currently offlineFr8Mech From United States of America, joined Sep 2005, 5358 posts, RR: 14
Reply 3, posted (4 years 11 months 3 weeks 4 days 13 hours ago) and read 2694 times:

It is a credit card issued by a bank or credit card company, that can only be used at the named retailer, or in some cases, affiliates. In the past, some of the retailers (Sears comes to mind) extended credit on their own without a bank backing the card.


When seconds count...the police are minutes away.
User currently offlineTUNisia From United States of America, joined Aug 2004, 1844 posts, RR: 5
Reply 4, posted (4 years 11 months 3 weeks 4 days 13 hours ago) and read 2680 times:



Quoting MWHCVT (Reply 1):
most are managed/underwritten by a major provided i.e. MBNA, Capitol One, CITI etc.

It's much better to get a store card issued by the store itself and not GEMB, etc..btw MBNA doesn't exist anymore and is now part of BOA (the former MBNA cards are located in FIA card services now for the most part).

There are some stores that still have their own bank and issue their own cards. Nordstrom FSB issues the Nordstrom store card as well as the Nordstrom VISA. Target National Bank also issues and services their own store cards and their own VISA cards.

Macys / Bloomingdales still service their own cards (VISA and store) but the financing is handled through DSNB (Department Store National Bank) which is part of Citigroup.

Quoting MWHCVT (Reply 1):
Often rates on these cards are higher than bank issued cards and have higher cost factors than bank credit cards,

Often, but not always. The rate on my Nordstrom VISA is only 8.24% Macys on the other hand is 22.99%, but the VISA portion is 18.74%, but you can't put store purchases on the VISA.

One last interesting tidbit is that Discover card was the brainchild of Sears at one point. It's changed many hands since then, but to this day you can still pay your Discover card bill at any Sears store!



Someday the sun will shine down on me in some faraway place - Mahalia Jackson
User currently offlineFalstaff From United States of America, joined Jun 2006, 6075 posts, RR: 29
Reply 5, posted (4 years 11 months 3 weeks 4 days 11 hours ago) and read 2648 times:
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Quoting TUNisia (Reply 4):
One last interesting tidbit is that Discover card was the brainchild of Sears at one point

I remember seeing Discover ads all over Sears in the mid 80s.

Quoting LTBEWR (Reply 2):
Store cerdit cards were some of the first credit cards and dominated until the 1970's when Master Card, Visa and others became to be broadly accepted as improved computer and communications technology made MC/Visa able to be used broadly. They were established to encourage more purchases at their store and not lose sales as people didn't have enough saved up cash.

Before cards many stores would extend credit to customers so they could pay on items over time. I think J.C. Penny was the first major US retailer to do that. When my mom was a kid in the 1950s the grocery store would sell them stuff on credit and bill them at the end of the month. I have a friend who lives in a very small town in Illinois and the store he shops at still does that.

Quoting Fr8Mech (Reply 3):
or in some cases, affiliates

I remember my old Western Auto card could be used at Western Auto, Sears, and National Tire & Battery.



My mug slaketh over on Falstaff N503
User currently offlineFuturePilot16 From United States of America, joined Mar 2007, 2035 posts, RR: 0
Reply 6, posted (4 years 11 months 3 weeks 4 days 10 hours ago) and read 2624 times:

Avoid them at all costs. In mosts cases, if you sign up for one of these cards, they will run a credit check. This is known as a hard inquiry and will definetly lower your credit score. I used to work in a store that offered a credit card and hundreds of people would apply for these cards each week, and they would run people's name through the credit system and lower their score while the peron would end up getting denied. And to think they ask me as an employee to do something that is so evil. Ruining a person credit score might as well be good as stealing their identity.


"The brave don't live forever, but the cautious don't live at all."
User currently offlineKirkSeattle From United States of America, joined Dec 2007, 258 posts, RR: 0
Reply 7, posted (4 years 11 months 3 weeks 4 days 9 hours ago) and read 2611 times:



Quoting FuturePilot16 (Reply 6):
and they would run people's name through the credit system and lower their score while the peron would end up getting denied. And to think they ask me as an employee to do something that is so evil. Ruining a person credit score might as well be good as stealing their identity.

The US consumer is dependent on credit. It's important to develop a good credit history so you can apply for a mortgage, get insurance, get a jo and yes, get a credit card.

People who are denied credit have obviously shown the inability to manage their finances or have fell on hard times because of high medical costs, divorce, etc. or they just haven't developed enough credit history.

Yes, applying for credit can reduce your score because it shows a need. Living with in your means, being responsible and paying on time will all increase your score.


User currently offlineFalstaff From United States of America, joined Jun 2006, 6075 posts, RR: 29
Reply 8, posted (4 years 11 months 3 weeks 4 days 9 hours ago) and read 2605 times:
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Quoting FuturePilot16 (Reply 6):
And to think they ask me as an employee to do something that is so evil

As you gain work expierence you will get asked (or told) to do things that are a lot worse.

Quoting FuturePilot16 (Reply 6):
while the peron would end up getting denied

Some people got credit I bet. I never had a problem getting credit.

Quoting FuturePilot16 (Reply 6):
Ruining a person credit score might as well be good as stealing their identity.

Credit scores get run all time. Lets see I have had my credit run for: buying my home, buying new cars, renting an apartment, employment, getting a credit card. My credit score is over 800. So I guess getting all those credit checks didn't ruin my credit. Sure getting too many credit checks can be bad, but getting a credit check isn't that big of a deal.

Having a bad credit score isn't a life sentence. You can overcome it if you try. However too many people with bad credit continue to make bad money decisions and they continue to have bad credit. A very good friend filed for bankruptcy 11 years ago and today he and his wife's credit is as good as mine. They have had no lasting effects and learned their lesson.



My mug slaketh over on Falstaff N503
User currently offlineFr8Mech From United States of America, joined Sep 2005, 5358 posts, RR: 14
Reply 9, posted (4 years 11 months 3 weeks 4 days 9 hours ago) and read 2597 times:



Quoting FuturePilot16 (Reply 6):
Avoid them at all costs. In mosts cases, if you sign up for one of these cards, they will run a credit check. This is known as a hard inquiry and will definetly lower your credit score. I used to work in a store that offered a credit card and hundreds of people would apply for these cards each week, and they would run people's name through the credit system and lower their score while the peron would end up getting denied. And to think they ask me as an employee to do something that is so evil. Ruining a person credit score might as well be good as stealing their identity.

I'm offered a credit card just about everytime I go to Target, Sears, Dillards or any host of other retailers. I know it's hard for some to take personal responsibility, but if you say 3 little words (no, thank you) your credit remains intact.

It is not evil to ask. You are not ruining their score by asking. They're ruining their score by applying too much, not paying on time and/or having a lousy debt/equity ratio.

Department store credit cards, like any other, are tools to use. Use them well and responsibly, all is well. Be foolish and you're aking for trouble.

Watch the interest rates and fees. Especially be careful with the same as cash deals (these usually come from furniture and appliance places), miss or even be late a payment and you're hosed. Don't pay off the balance by the end of the "promotion period" and you're liable to pay the entire accrued interest. Read the fine print, especially on retailer cards.



When seconds count...the police are minutes away.
User currently offlineLASoctoberB6 From Japan, joined Nov 2006, 2380 posts, RR: 1
Reply 10, posted (4 years 11 months 3 weeks 4 days 6 hours ago) and read 2560 times:

Okay, thanks for the help! Now, say I wanted to purchase a laptop from Best Buy or Fry's Electronics, but didn't have all the money in one lump sum to purchase it. You use the store issued credit card to make monthly payments on the laptop, and when it's all paid for, you cancel the account. Is that possible? Is that how it works?


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User currently offlineFuturePilot16 From United States of America, joined Mar 2007, 2035 posts, RR: 0
Reply 11, posted (4 years 11 months 3 weeks 4 days 6 hours ago) and read 2553 times:



Quoting KirkSeattle (Reply 7):
The US consumer is dependent on credit. It's important to develop a good credit history so you can apply for a mortgage, get insurance, get a jo and yes, get a credit card.

Uh no. I know a woman who has a great house, a great car and a great and job and has Never had a credit card. She buys everything cash and I personally believe that if you want to do something that's the way to go. I will recieve some heat for saying his but dealing with credit and loans is exactly what got us into this mess in the first place. People go to a bank and say hey I need a loan for a house that I can't afford. The bank says ok and we will tack on a huge amount of interest to make money. When the person ends up not being able to pay the mortgage, the bank has to repo it and end up selling it at a much lower price. That's how they lose money.

Sometimes it works that way with credit cards as well. Credit cards are sometimes for people who know that they don't have the money to purchase something they want, so they get a card, buy the item and with all the interest, they cannot pay it off. Personally, I have student loans for school and paying those back is the way I intend to build my credit, with low interest (sometimes 2.5%) unsibsidized loans.



"The brave don't live forever, but the cautious don't live at all."
User currently offlineCheetahC From South Africa, joined Apr 2009, 69 posts, RR: 0
Reply 12, posted (4 years 11 months 3 weeks 4 days 5 hours ago) and read 2538 times:

Quoting FuturePilot16 (Reply 11):
Uh no. I know a woman who has a great house, a great car and a great and job and has Never had a credit card. She buys everything cash and I personally believe that if you want to do something that's the way to go. I will recieve some heat for saying his but dealing with credit and loans is exactly what got us into this mess in the first place. People go to a bank and say hey I need a loan for a house that I can't afford. The bank says ok and we will tack on a huge amount of interest to make money. When the person ends up not being able to pay the mortgage, the bank has to repo it and end up selling it at a much lower price. That's how they lose money.

Credit is a good thing if you use it properly. As a example I have a credit card with a two month interest free period, so instead of spending my own money I can spend the bank's. Even if I just leave my own money untouched in this time I am scoring just by the interest earned, I then simply settle the account interest free.

Obviously it is very important to state that this only works if you remain within your limits, I never spend more than what I would have been able to spend in cash.

[Edited 2009-08-08 14:20:31]

User currently offlineFbgdavidson From United Kingdom, joined Oct 2004, 3701 posts, RR: 28
Reply 13, posted (4 years 11 months 3 weeks 4 days 5 hours ago) and read 2537 times:



Quoting LASoctoberB6 (Reply 10):
Now, say I wanted to purchase a laptop from Best Buy or Fry's Electronics, but didn't have all the money in one lump sum to purchase it. You use the store issued credit card to make monthly payments on the laptop, and when it's all paid for, you cancel the account. Is that possible? Is that how it works?

Yes. I went to buy a couple of electronic items at Best Buy a few months back and they were doing 0% interest for 24 months if you bought more than $x worth of stuff. I was prepared to for it in full but as I was above that level I opened an account. I log on each month and make my payment. The money I saved by taking advantage of the 0% interest went into an ETF that has gone up 45% since I put that money into it. Between that and inflation I've effectively made money off Best Buy! When it is all paid off, in 20 months time I'll close the account.

My credit scores still remain in the 810-825 region.

Quoting FuturePilot16 (Reply 11):
I know a woman who has a great house, a great car and a great and job and has Never had a credit card. She buys everything cash and I personally believe that if you want to do something that's the way to go. I will recieve some heat for saying his but dealing with credit and loans is exactly what got us into this mess in the first place. People go to a bank and say hey I need a loan for a house that I can't afford. The bank says ok and we will tack on a huge amount of interest to make money. When the person ends up not being able to pay the mortgage, the bank has to repo it and end up selling it at a much lower price. That's how they lose money.

You're making extreme generalisations here. Most people cannot afford to go out and buy a house for cash and banks cannot afford to lend money at 0%, they've got to make some margin somewhere to stay in business.

I now work in the mortgage business and see the entire financial picture of everyone that comes through the doors of my office. If you cannot afford the loan (as per Fannie Mae underwriting guidelines) you won't be approved, simple as that. The vast majority of borrowers are perfectly legit. The company I work for has only had two loans in their 10yr history go into foreclosure and both of those were cases of fraud on the part of the person borrowing money.

Cash is fine if you want barter absolutely everything, personally I cannot be bothered. On a car, furniture and more expensive items then sure I'll try and get myself a longer

Quoting FuturePilot16 (Reply 11):
Credit cards are sometimes for people who know that they don't have the money to purchase something they want, so they get a card, buy the item and with all the interest, they cannot pay it off.

WHAT? Personally I pay my credit cards off in full each month, earn a good deal of frequent flyer miles in the process. It is was more convenient than paying cash for everything and it means I can instantly see how much I'm spending each month.

If you are financially responsible and can live within your means then a credit card can be a very good thing indeed. Sounds like you've been watching too much Dave Ramsey on Fox Business Channel!



"My first job was selling doors, door to door, that's a tough job innit" - Bill Bailey
User currently offlineFalstaff From United States of America, joined Jun 2006, 6075 posts, RR: 29
Reply 14, posted (4 years 11 months 3 weeks 4 days 4 hours ago) and read 2515 times:
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Quoting FuturePilot16 (Reply 11):
I will recieve some heat for saying his but dealing with credit and loans is exactly what got us into this mess in the first place. People go to a bank and say hey I need a loan for a house that I can't afford. The bank says ok and we will tack on a huge amount of interest to make money. When the person ends up not being able to pay the mortgage, the bank has to repo it and end up selling it at a much lower price. That's how they lose money.

Do you even own a home? My house was $85,000. If I waited until I had $85,000 in cash I would never be able to buy a home. I would be shelling out rent each month and I would never be able to save the money to buy a house and pay rent. $85,000 is cheap for a house in a decent neighborhood. In many parts of the county ghetto houses aren't that cheap.

Few people can walk buy a house with cash. People need to get loans for houses. Not everyone buys a home they can't afford. People end up not being able to pay their bank notes for a lot of reasons. Some buy houses they couldn't afford. Some people lose jobs, such is the major case where I live. Not every person who gets a bank loan to buy a house is some kind of dead beat.

If your friend owns her own home and paid cash for it you have one of two types of friends: She is wealthy enough to pay cash or she lives in a ghetto neighborhood like Detroit where you can buy a house for less than $5000. A vast majority of people have or have had home loans. Even many very well off people get them.

Banks make money on charging interest on loans. Without that we would have no banks and we would have to put our money in a shoe box in the closet.

I own two cars. One is a beater, 84 Chevy truck and was $400. The other is a 2008 Lincoln Town Car. I couldn't afford a $45,000 car in cash. Even a lot of people who could don't want to spent that much cash all at once. I could afford $400 a month for that car so I bought it on credit. If I went through life only buying things for cash I would be stuck drving $400 trucks.

Quoting Fbgdavidson (Reply 13):
WHAT? Personally I pay my credit cards off in full each month

Me too. I have had some things that come up that I needed (like emergency travel needs or emergency home repairs) that I didn't have the money for. I couldn't pay it off the next month, but I was able to pay it off in two months.

Quoting LASoctoberB6 (Reply 10):
Okay, thanks for the help! Now, say I wanted to purchase a laptop from Best Buy or Fry's Electronics, but didn't have all the money in one lump sum to purchase it. You use the store issued credit card to make monthly payments on the laptop, and when it's all paid for, you cancel the account. Is that possible? Is that how it works?

Sure. Why cancel the card? Unused credit can be a good thing.

[Edited 2009-08-08 15:02:00]


My mug slaketh over on Falstaff N503
User currently offlineFbgdavidson From United Kingdom, joined Oct 2004, 3701 posts, RR: 28
Reply 15, posted (4 years 11 months 3 weeks 3 days 23 hours ago) and read 2462 times:



Quoting Falstaff (Reply 14):
A vast majority of people have or have had home loans. Even many very well off people get them.

Exactly.

In my current, mortgage industry, work I've seen people with a household income of $60,000/month refinancing an $85,000 mortgage. In my previous line of work, investment planning, I saw people with a net worth of $20m+ have mortgages and car loans they could pay off and not even blink. Smart people use other people's money and benefit from it.

Having a mortgage or debt isn't an issue if you have the ability to invest that money more profitably.Why spend $50,000 on a car if you can borrow $50,000 at 1.9% (or whatever silly rate there is now) and put that $50k in a more lucrative investment which over time accrues more money. You're better off for it! Far too many people in the 'debt is dumb' camp overlook this.

Where it gets stupid is people who continuously live beyond their means and see borrowing and living off 20% APR credit cards as a lifestyle choice.



"My first job was selling doors, door to door, that's a tough job innit" - Bill Bailey
User currently offlineLASoctoberB6 From Japan, joined Nov 2006, 2380 posts, RR: 1
Reply 16, posted (4 years 11 months 3 weeks 3 days 6 hours ago) and read 2359 times:



Quoting Falstaff (Reply 14):
Sure. Why cancel the card?

Well, I wouldn't want it to get out of control and turn into an ugly problem. I just want the laptop  Silly



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User currently offlineFalstaff From United States of America, joined Jun 2006, 6075 posts, RR: 29
Reply 17, posted (4 years 11 months 3 weeks 3 days 6 hours ago) and read 2357 times:
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Quoting LASoctoberB6 (Reply 16):
Well, I wouldn't want it to get out of control and turn into an ugly problem. I just want the laptop

Just be good and don't buy more stuff. I know it's hard, but you'll have to be strong! I rarely ever go to an electronic shop or hardware store unless I need something specific because I will be tempted to buy things I don't really need.



My mug slaketh over on Falstaff N503
User currently offlineLASoctoberB6 From Japan, joined Nov 2006, 2380 posts, RR: 1
Reply 18, posted (4 years 11 months 3 weeks 1 day 23 hours ago) and read 2244 times:



Quoting Falstaff (Reply 17):
Just be good and don't buy more stuff.

Don't buy more stuff on the Best Buy card, right?

So, if I get the Best Buy credit card and the only ever purchase I make on it is the computer. The total price of the laptop is all I have to pay back, correct?



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User currently offlineKirkSeattle From United States of America, joined Dec 2007, 258 posts, RR: 0
Reply 19, posted (4 years 11 months 3 weeks 1 day 23 hours ago) and read 2244 times:



Quoting LASoctoberB6 (Reply 18):
Quoting Falstaff (Reply 17):
Just be good and don't buy more stuff.

Don't buy more stuff on the Best Buy card, right?

So, if I get the Best Buy credit card and the only ever purchase I make on it is the computer. The total price of the laptop is all I have to pay back, correct?

Correct.

As long as you get the delayed billing option where there are no payments for 18 months or such. Make payments montlhly even though they are not required and finish paying before the 18 months. This seems to be the offer they are running based on their website currently.

Cheers,
-Kirk


User currently offlineFalstaff From United States of America, joined Jun 2006, 6075 posts, RR: 29
Reply 20, posted (4 years 11 months 3 weeks 1 day 23 hours ago) and read 2244 times:
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Quoting LASoctoberB6 (Reply 18):
So, if I get the Best Buy credit card and the only ever purchase I make on it is the computer. The total price of the laptop is all I have to pay back, correct?

That is correct. I bought a bunch of video equipment in January on my Best Buy card, because I didn't have the money then, but I knew I would have it in a couple of weeks. I wanted to take advantage of a sale. I paid the bill off in full the next month and I have not even got a statement from them since. I have no balance so they don't send me a bill. That was the first time I ever used the card for more than a small purchase. Some credit cards have a yearly fee and will charge you something even if you buy nothing. If the card as no annual fee than you owe only the balance from your purchases and any interest.

Also by having that account open and have no balance on it you look responsible. Unused credit can be good.

I once applied for a loan at my bank and they wanted credit references. I was just out of school and didn't have much credit history. I only ever had a car loan, which was paid off and one credit card. I didn't have enough credit history to get the loan. I got a Best Buy credit card and once I had that I had three things in my credit history. One being the store card I never used and I got my bank loan, which has since been paid in full.

Quoting LASoctoberB6 (Reply 18):
Don't buy more stuff on the Best Buy card, right?

Correct.



My mug slaketh over on Falstaff N503
User currently offlineFr8Mech From United States of America, joined Sep 2005, 5358 posts, RR: 14
Reply 21, posted (4 years 11 months 3 weeks 1 day 23 hours ago) and read 2244 times:



Quoting Falstaff (Reply 20):
Also by having that account open and have no balance on it you look responsible. Unused credit can be good.

Too much unused credit is bad. A potential creditormay see that unused credit as potential debt and count it against you.



When seconds count...the police are minutes away.
User currently offlineLASoctoberB6 From Japan, joined Nov 2006, 2380 posts, RR: 1
Reply 22, posted (4 years 11 months 3 weeks 1 day 23 hours ago) and read 2244 times:



Quoting Falstaff (Reply 20):
and any interest.

That would be incurred if you don't pay it off within the agreed time frame?

Quoting Falstaff (Reply 20):
Quoting LASoctoberB6 (Reply 18):
Don't buy more stuff on the Best Buy card, right?

Correct.

Then, after it's all paid for, terminate the card and account? Sorry for the back and forth, but I just want to make sure I get it.



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User currently offlineFalstaff From United States of America, joined Jun 2006, 6075 posts, RR: 29
Reply 23, posted (4 years 11 months 3 weeks 1 day 23 hours ago) and read 2244 times:
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Quoting Fr8Mech (Reply 21):
Too much unused credit is bad. A potential creditormay see that unused credit as potential debt and count it against you.

depends on the creditor. I have heard both. In my case the unused credit showed the bank I was responsible by not using it.



My mug slaketh over on Falstaff N503
User currently offlinePWM2TXLHopper From United States of America, joined Jan 2004, 1321 posts, RR: 1
Reply 24, posted (4 years 11 months 3 weeks 16 hours ago) and read 2117 times:



Quoting LASoctoberB6 (Reply 10):
Okay, thanks for the help! Now, say I wanted to purchase a laptop from Best Buy or Fry's Electronics, but didn't have all the money in one lump sum to purchase it. You use the store issued credit card to make monthly payments on the laptop, and when it's all paid for, you cancel the account. Is that possible? Is that how it works?

No, you don't use the card to make your payments each month. You'd use the card to purcahse the computer in full at the store. Then you'd have a balance on your card for the full amount of whatever it was you paid.

Then, at this point, each month you'll receive a monthly statement/bill from the credit card issuer. There will be a payment due date, and a minimum payment amount for the bill. If you miss a monthly payment, you'll have a late charge added to your card balance. Usually $20-50. Also, this takes a whack at you're credit score! Especially if you have more than one late or missed payment! Usually, you'll also have a percentage of the balance each month added to the bill as interest. Store cards are notorious for having high interest rates! Best Buy lures you in by giving you an interest free or low monthly interest rate card for a limited promotional payoff period, but after this expires, if the balance hasn't be paid off, than each month they'll start adding ridiculously high differed finance charges to your balance. These are a type of interest.

Let's say you originally pay $500 for a computer, o.k.? If you miss a couple payments, or are late, or don't pay off the balance before the promotional payoff period expires and the finance charges and interest rates come into pay, that original $500 you owed could balloon to $2,000 before you know it! Basically, the interest just keeps snowballing and the balance get's higher and higher and get's beyond your means to pay it off, because you can't keep up! The interest rates are so high, that every time you pay part of the bill, the newly added finance charges and interest just bring the balance right back to where it was before your payment, or maybe even higher! Even more so if you're only paying minimum payments.. So, you've really got to be careful that you're responsible with keeping payments on time and not getting over your head in debt that you know you won't have the means to pay off in a timely fashion. If you destroy your credit with an overdue or delinquent account, it will take seven years before you can get your credit back. People won't rent you an apartment, or give you a loan for a car, or let you rent a car or make a hotel reservation, because you''ll have no credit card because you ruined it with a store issued credit card that got out of control when the promotional low interest time period expired and they started raping you with interest and finance charges that eventually add up to more than the original cost of the computer!


And always read the fine print in full on the back of any credit card application you submit! Especially the part about interest rates and finance charges, or annual card member fees that they;ll charge you for.


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