‘Think Twice Before Accepting a Retail Credit Card’ by Michael Newman

Michael Newman’s latest é-Wealth Daily’ article is titled “Think Twice Before Accepting a Retail Credit Card”. [‘e-Wealth Daily’Article]

Michael Newman’s latest ‘e-Wealth Daily’ article:

Think Twice Before Accepting a Retail Credit Card

These days, it seems like you can’t go into a shop without being offered a retail credit card. Sears, Wal-Mart, The Home Depot, Best Buy and pretty much any other major retailer you can think of all offers their own card. Although they may seem like a good deal at the time, these cards can lead to a number of headaches that include climbing out of debt.

Some of you may have even accepted these cards during your holiday shopping. After all, they can be pretty hard to turn down. They usually offer an instant savings of 10%-25% right off the bat and no interest charges if the item is paid for in a certain time period. For most of us, this is a hard deal to turn down. After all, who wouldn’t like a discount?

If you were able to resist the offers, good for you. You’re likely better off for it. For those who accepted them, there are some things you should know.

For starters, if you end up missing a payment on one of these cards, you’re almost instantly eliminating your initial savings. Many of these cards have a condition where if a payment is missed, the interest kicks in immediately. Sometimes, the interest on these cards is much higher than on regular credit cards like Visa or MasterCard. Some can get up to the 25% range.

Something else to look out for is the fact that many of them come with conditions that must be followed in order to ensure the no-interest payments are kept up. For example, most of these promotions require payment in a certain time frame. For example’s sake, let’s say one year. So, if you bought a new LCD TV on December 26, 2010, you have until December 14, 2011, to pay it off in full, without interest. Monthly payments must be kept up, as well.

Now, you may be asking yourself why you only have until December 14 to pay for it. Well, this is because of the billing cycle your creditor operates on. Basically, it will be 12 months to the payment date. Therefore, if you make your final payment on January 14 when you receive your bill, your payment will be late and you’ll be charged interest.

What’s one month’s worth of interest — who cares, right? By then you probably owe about $100.00, so what’s another $25.00? Well, if that’s what you’re thinking, here’s a little bit of news for you: you’ll be charged interest dating back to the original purchase date of the TV. That’s one year’s worth of interest, possibly at 25%, thrown at you because you were late on one payment. That’s right folks. The minute you make the
purchase, the interest starts accumulating. If you make your payments on time, you’ll never know. You miss one and you’ll be scratching your head trying to figure out why there’s so many numbers on your bill.

If you took on one of these cards over the holidays, make sure you pay it as fast as possible to avoid falling into debt.

e-Wealth Daily

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The e-Wealth Daily Bulletin brings you daily tips, advice and breaking news related to home businesses, small businesses and internet marketing. Our team of experts gives you the information you need to take your business pursuits to the most profitable level. Founded by Adrian Newman in 2003, the e-Wealth Daily Bulletin and www.ewealthdaily.com are a division of Lombardi Publishing with online newsletters reaching over 100,000 subscribers each month.

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