How And Why Should You Say No To The Retail Credit Cards?
Some of the leading consumer sources are of the opinion that consumers should not invest in retail credit cards that are being offered during the festive period, especially during Black Friday. They believe that such retail credit cards provide credit on heavy interest rates which can otherwise prove to be quite risky and credit killing. Although, superficially these credit cards seem quite lucrative and propose to save few bucks when the consumers sign for them right on the spot, the end result can be totally different. The high interest rates when combined with limited benefits make them one of the worst credit cards around.
They come with high interest rate: When compared with average credit card, retail credit cards more often are heavy on interest rates, actually much higher than any on the market. The latest information on Forbes reveals that the average interest rate of retail card in the market hovers around 24 percent with both bad and good credit consumers getting even deal.
In comparison, the average rate of interest on regular credit card for a consumer with good credit was closer to around 15 percent. So, it’s quite evident that the good consumers who sign up on spot for the retail credit cards have compulsorily to pay around 9 percent more in the form of interest which certainly cannot be a wise decision.
No advantage of intro periods: It’s an understood thing in the credit card market that the best time to buy and use a card is when it is being introduced for the first time. This way, the consumer gets lot of good offers from 0 percent APR for a year or more for purchasing and transferring of balance, valid all through the introductory period. With retail credit cards, no such offers are attached and hence they come across far less benefiting. This is because in case of retail credit cards, the introductory period offer is limited to only the first purchase that is made immediately after buying the card on spot, which can gain you an overall net saving of 15 to 20 percent (depending upon scheme of the retailer this may vary).
From then on, as a consumer you have to gear up to pay high interest (more than 20 percent) in case the bills are not paid on time.
Limited rewards: Regular credit cards come with various other offers whereas with retail credit cards such rewards are extremely less.
All these reasons are enough to sideline the request for retail credit card on offer this festive season.