According to a survey of 61 major retail credit cards by CreditCards.com, retail credit cards are becoming debt traps for consumers. Many of these cards have an average APR of 23.23%, compared with 15.03% for other credit cards. This means a consumer who spends $1,000 on a retail card, and made only the minimum payments, would spend more than six years repaying that balance and end up paying a total of $1,840 for the $1,000 item. That is equivalent to an 84% markup!
Retail credit cards sometimes have benefits that may be worth it to consumers who frequently shop at the store and pay the balance off in full every month. Many of these cards come with perks like store discounts, special sales and rewards for cardholders. But miss one payment one month and you run into trouble on most of these credit cards.
Below are the retail credit cards to steer clear of, according to the CreditCards.com survey:
1. Zales has up to a 28.99% APR.
2. Office Depot Personal Credit Card has a 27.99% APR.
3. Staples Personal Account has a 27.99% APR.
4. My Best Buy has up to 25.24% and 27.99% APR, depending on your credit score.
5. My Best Buy Preferred has a 25.24% and 27.99% APR, depending on your credit score.
Bottom line: Retail credit cards are a bad idea for anyone who does not pay their balance off in full every month, because the interest rates are so exorbitant.
If you are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
Related Resources:
http://finance.yahoo.com/news/don-t-credit-cards-5-134815527.html