I was listening to my favorite radio show earlier this week when I heard one of the DJs mention how she was scammed on Black Friday and I just had to blog about it. She was discussing the ever popular store credit card. She had gone to a popular chain store that had some great Black Friday deals, gathered all of her purchases and aimed herself at the register. Once it was her turn she got the all-too-familiar, "Open a store card and save 15%!" line from the cashier. She asked if that meant she would receive the 50% off that the store was offering with an additional 15% off and the cashier indicated yes. Well, what actually happened and happens all the time in this situation is that the items she purchased were jacked up to the original retail value and then discounted from there. The stores do this in order to gain a larger profit margin. Most customers won’t even notice the difference in the bottom line. Even more would never think to bring it up after everything is already wrung up and they have 15 people in line behind them!

I found an article on The Palm Beach Post that talked about this very issue. The author indicates that people with store cards not only get roped in by the initial savings but also spend significantly more than those consumers without the store cards. I for one can attest to that! That’s one major reason why I always turn down those offers, it is easy to get carried away especially when it is a store you frequently shop in and they offer discounts if you use the card. Not to mention the ease of approval with store cards. Consumers that would not get approved for a major credit card have a much better chance at approval through an individual retailer. "People who use store credit cards are a cash cow for retailers. For instance, Target has said that customers who use its store credit cards spend about 50 percent more in a year than customers who don't", as mentioned in the article. For this reason retailers are pushing their cashiers and salespeople to reel more unsuspecting consumers into the bad debt web. The best way to approach these retail cards, if you have to have them, is to pay them off immediately. Not only are they dangerous for climbing balances, the interest rates on them can be as high as 25% higher than bank issued cards which creates empty but painful debt. So actually when you take that into consideration, as indicated by CEO Bill Hardekopf of Lowcards.com, "A 10 percent discount on purchases does not justify a 28 percent interest rate".

Basically what I am saying is that you really have to be wary about retail credit cards. There are multiple ways for them to bleed you of your hard earned money. Your best bet is to think it through and not fail to the pressures of the holidays and disillusioned incentives.

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Jennifer Ulrich

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