Last week, Debbie from http://www.creditorweb.com/ was helping me lighten my purse by suggesting I pare down the credit cards to... gasp... one. I'll be honest, I reduced the number of cards but didn't bring it down to the solo piece of plastic.
Which cards did I axe? The store credit cards (I tend to get them for the discount and then cancel them afterwards).
Here are Debbie's thoughts on store credit cards...
"Stay far away from store credit cards! Almost all of them will have very high interest rates. They'll entice you with a 10-20% off "today's order" special in an effort to get you to apply for their card when you're making a purchase, but unless you never carry a balance on the credit card from one month to the next, you're going to pay more than that in interest within just a few months on a store credit card."
I don't carry credit card balances so the interest rates on store credit cards don't worry me. I AM a bit concerned about the security of data. It seems that store credit cards hit the news as being "at risk" more often than other cards.
While I was talking with Debbie, I asked her what the number one mistake she felt people made with credit cards.
"People tend to forget that you have to find a way to pay for the purchases made with credit cards at the end of the month. The best way to use a credit card is to make purchases throughout the month and then pay the balance in full at the end of the month- to avoid carrying a balance but if people were all able to do that- chances are we'd all buy in cash rather than use a credit card to begin with! It's very easy to overspend with a credit card, and I think that's the biggest mistake- simply buying more than we can afford."
Too true. It is so easy to lose track of spending with credit cards. That is why for the small purchases (like grocery shopping), I use cash.
Comments (2)
The one and only time I've been burned with a credit card was a store card. Granted it was my fault for making the purchase in the first place but when everything was said and done the one singular purchase made on the card cost me more than double (and I paid the card down relatively quickly). Good advice to stay away from store cards.
Posted by Matt | February 20, 2008 12:23 PM
Posted on February 20, 2008 12:23
I only have one store Credit card and I use it to earn extra points that each Christmas helps stretch my shopping for the children.
Otherwise all of my purchases are made thru a Bank Master Card whose limit I can afford to pay off each month. A card that sens me away once each year on a Mother escape get away !
Posted by Karrine | February 25, 2008 12:31 AM
Posted on February 25, 2008 00:31