When you get the register, the sweet little sales associate rings up your items, and asks if you'd like to use your Penney's card. And you're thinking I just spent $46.51 and bought enough school clothes for my family of seven! Do I look like the kind of person who would be stupid enough to own a store credit card? So you smile and say, "No, thank you. I'll pay with cash." And the sales associate smiles back and says, "Would you like to apply for a Penney's card today? You'll receive 20% off your purchase today." And that makes you think If I use their card today I'll get 20% off and that would be a really great thing. Then I can pay it off right away, and it won't cost me anything, right?
Don't do it! DO NOT DO IT!!! If this scene were in a movie, you would hear the scary music playing at this point and you'd be watching the character on the screen who is about to walk blindly into the arms of a monster, and you'd be screaming, "No! Stop! Don't do it! It's a trap!"
There are two kinds of people in this world, those who are perfect with money and those who aren't. If you have any doubt about your absolutely perfect money handling skills, you probably belong in the second category.
Store credit cards are a monster that we mere mortals are simply not equipped to handle. Stay away.
Most of us thrifters agree that credit cards are not a good idea, so it should go without saying that a store credit card is also not a good idea. But somehow some of us still get suckered into using them. Regular credit cards have an average interest rate of 14%. The average store credit card has an interest rate of over 20%. So why do we still use them? Usually we get hooked by the Save 20% off today's purchase! sales pitch. But look at it in real numbers, if you don't pay it off (because let's face it, most of us don't) you'll pay back that 20% in interest. If you miss just one payment, you'll get slapped with a $30-40 fee. Any money you saved can be wiped out in a single mistake. And now you've just let a monster into your wallet to continue devouring money for years to come. Why do that to yourself?
Do you already have a store credit card? Cut it up. Right now. I'm serious. Do it!
Have you ever made a late payment on any of your bills? Ever?
Then cut up your card.
Have you ever carried a balance on a credit card for more than 30 days?
Then cut up your card.
Store credit cards are a glimmering road of temptation that you just don't want to walk down.
Once upon a time when my husband and I were newly married, we were wandering through a department store and he decided he needed a PlayStation (for you youngsters this was the original). We were still in the "Credit Cards are Free Money!" stage of life, so when the associate asked if we wanted to apply for a store card, we were all too eager to agree. It cost $99.99 plus tax. We paid with the card and went home. And then followed a four year ordeal with the store's credit department. We made regular payments of $25 for over a year, but the balance never seemed to go down. Then my husband lost his job, we had a baby, and well, we did not do so great at making our payments. As late fees piled up, the balance went from just under $100 to well over $600! Then the collection calls started. And things really spiraled out of control from there. (For more on dealing with debt collectors, click here). In the end our $100 PlayStation cost us over a thousand dollars and seriously scarred our credit. If that's not enough to keep you away from store cards, then I don't know what will.
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| Yes, I know this is a debit card and not a store credit card, but I don't have any store cards to take pictures of. |
Bottom line, Store Credit Cards = Pain = Stress = Bad Idea
So wake up and hear the creepy warning music. Turn back now while there's still time.
Marcia
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