As the holiday season approaches, consumers will need to start thinking about the most cost effective way to spend money. Most retailers will be offering their own credit card options, but what about using the credit card you currently have in your wallet for that 70’ LED TV. Yes, the retailer might offer 0% APR for 6 or 12 months on that purchase, but don’t based your decision on just that. Most retail credit cards have extremely high standard APR’s after the initial time period. Take the “Best Buy Reward Zone Credit Card for instance. Now I don’t know what “intro rates” they are offering right now, but the APR for the Best Buy credit card is 25.24% or 27.99% based on your credit worthiness. Look at these types of things before you sign that application.
Here are some things that might help you this holiday season.
First Credit Card – If you currently do not have a credit card and you are using this to build credit, then great. However, there are many great credit card options for first timers. Do your research.
Know Your Credit Score – There is nothing more embarrassing than getting denied at the store in front of everyone. There are many sites out there that will give you a glimpse at your credit score for free. In addition, the US Government will allow you to check it once a year for free. – Check Here
Check the APR – For consumers that have credit card history with one bank, it might be better for you to use your current credit card to buy your gifts. If you haven’t done so, call you banks and try to get a lower rate. Most banks won’t notify you when you are eligible for a lower APR. An APR of 9.99% is a lot better than 25.99%.
Check Rewards – If your current credit card offers good rewards, points, or cash back, it might be a better alternative than getting a retail credit card. Most retail credit cards match 1 to 1 on rewards and nothing else. There are many good reward credit card options that give you more.
What about Balance Transfers? – With the current balance transfer market booming, you might want to consider purchasing your gifts on your current credit card and then transferring the balance to a 0% APR credit card. The Discover More Card is offering a 0% intro APR on balance transfers for 18 months, then the variable standard purchase APR of 11.99% – 20.99%. Those 18 months will carry you until 2013, and that’s a good amount of time.
Needless to say, consumers need to be smart about how they use credit cards. Getting multiple credit cards this holiday season is not the best route to take. Do your best to understand what the terms are before you submit the application.