Sunday, November 15, 2009

Credit Cards at Department Stores

Written by Stefanie Marty

Last week GE Capital Retail Consumer Finance renewed its private label credit card programs with the two US retailers Meijer for five years and JCPenney for four years. Meijer’s management said that such a program helps loyal customers to save even more at its store. Such programs provide credit to millions retail customers and have attracted a lot of attention in the market. Even though such a card may seem a great deal at the first glance people warn consumers of such credit cards because of different reasons.

By applying for a JCPenney card you get 10% off your first purchase and it allows you to be on the list for some promotions and events held at the store. These are the characteristics that attract a lot of consumers.
But if you take a closer look, you will see that there are many negative features that lower your spending power. First, the credit limits on JCPenney and other department stores credit cards are very low. Even people with good credit records cannot cover their monthly shopping expenses with their credit limit. Second, the interest charged at such credit cards are ridiculously high, up to 21.99%, and unless you can pay the outstanding amount at the end of every month, such a credit card is nothing for you. Third, once they signed up many consumers complain about insufficient support.
Before you apply for a credit card at any department store, consider all your other options. Many times there are other options that give you much better rewards and a higher spending power.

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