Department Store Credit Card Application
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The Advantages and Disadvantages of Using Department Store Credit Cards
Author: Court Tuttle
Department store credit cards are widely used in our world today. They allow you to buy things from a particular store that you normally would not be able to get. Getting a department store credit card is actually quite simple.
It is much easier than getting a regular credit card, and you are allowed credit that you normally may not have qualified for. Still, is it really worth it?
Should you really get a department store card, or would it be better if you just used a regular credit card? Here are a few pros and cons of having a credit card designed for a specific store.
Department Store Credit Card Application
Disadvantages
High Credit limits
Having several department store cards with limits that you think are not very high can actually add up to be quite a bit. Having even small amounts on your department store credit limits becomes one large limit, which can make it difficult to get a major credit card. Having such a high credit
Department Store Credit Card Application
limit because of your combined department store cards ties up your credit line and only allows you a small amount in which you can add another credit card.
No Rewards
Department store credit cards are more dangerous than they are useful when they do not give you something back for what you buy. Just being able to buy it on credit is not worth it, and can get you into financial trouble that you do not need.
Get a card that allows you to save money on the products that you buy, and keep only those cards. Once you pay them off, don't keep them. Having these cards will tie up your credit line and make other cards difficult to acquire.
High Interest Rates
Some department store cards have high interest rates that end up costing you more than you bargained for. Sometimes even the rewards do not make up for the money you spend on interest just to get these cards. Making late payments on these will also allow department stores to shoot your rates sky high, so you have to pay on time, or the card will be more of a burden than an advantage.
Advantages
Free Stuff
Some department stores allow you to receive free amenities when you use your card to buy things online or from a magazine. Services such as shipping and handling and/or free gifts sometimes come with your purchases when you buy an item from a store with its credit card. This can be bought on the internet, over the phone, and through magazines, all being delivered by mail to your home.
Rewards
Buying things from a department store using the card specifically designed to use at those particular stores can sometimes save you money. Depending on the department store, you may be able to get a certain percentage, or a certain amount of money back for a certain amount that you spend on a purchase. In this aspect, it is much like a rewards card, though it is only limited to purchases and savings within that particular department store.
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Well, usually when you sign up for the card there are stipulations that you must keep the card a certain period of time. Also, you only save money if you use the card for the initial purchase, not just for signing up.You can cancel a credit card at any time but the inquiry itself will show up on your credit. That can’t be changed. If you use the card and pay it off over let’s say 6 months it actually builds better credit. Then cancel the card(do not just cut it up, actually call and cancel the card). This shows a card you had in good standing then paid off and closed yourself. Great for your credit! Good Luck!
Your uncle recorded a higher income because lenders typically won’t extend credit to someone who doesn’t make much (e.g., they might not be able to repay their debts). Alot of credit card applications that I’ve seen require a minimum annual income of $10,000.
Simply applying for a credit account dings your score. Being denied the account won’t hurt you…it’s the inquiry of your credit report that will affect you.
Lenders understand that first time borrowers need to start somewhere. They may accept you, but give you a really low balance.
By the way, I don’t consider department store credit cards real credit cards. They don’t usually report your activity to credit bureaus, unless they want to report something negative. If they don’t report to the credit bureaus, and they give you an account, ask them if they can do it for you.
If I sign up for a department store credit card and cancel it, what would happen?
If a store had a promotion running where you could save money by signing up for their credit card and you were to cancel the application the next day or so before you got the card, would that negatively affect your credit or would it be fine so long as you do not purchase anything?
Why do so many people keep going into credit card debt?
Question? What makes people keep using them when they see the destruction it is causing?
Many people, mostly younger folks and women, have so many credit cards they end up in severe debt and ruin their credit for many years to come. Credit card applications are mailed out by the tons and people keep activating them knowing the interest rate is or will be up to 20% or higher. Everyone needs at least one credit card and no more than two. You also need one revolving (department store) credit card to establish a good credit history. The limit on the credit card(s) should be no more than 10% of your annual salary and the revolving card half that. Always make a minimum of a double payment on all your credit cards and pay on the due date. Never ever be even one day late. The interest rate and late fees will destroy you. If you are experiencing problems the first thing you need to do is carefully cut the cards up and throw them away. If you can not afford to pay the total monthly bill attempt to get a consolidation loan to get out of debt. The monthly payment will be less than the total monthly payment of all your cards with a much lower rate. Some banks and credit unions will be willing to help you out if they know why you are taking out the loan. Financial debt can create so much strain it can even destroy your peace of mind and your marriage. Don’t fall into that trap.
department store credit card?
Today my mom decided that i would try to apply for my first credit card at a department store named “dillards” and she told me to refer to my uncle for advice on filling out the application. When he helped me fill it out i noticed that he put a higher income then what i actually make. If the card were to get denied because of the wrong income, or ANY other reason for that matter, would that affect my credit score. This would’ve been my FIRST credit card application so i’m wondering if i even HAVE a credit score since i’ve never had a credit card. Or would the application just not go through.
My question to you is: Why do credit card companies continue to blindly give out credit cards to people without checking their finances?
Does it make sense to you to give a credit card to someone who already has several loans and their combined minimum payments is over 50% of their income? Would any sane person give credit to someone under this situation?
This is exactly who credit card companies go after though. Who’s fault is it?
If he just put you down as an authorized user of the account, such as you getting your own card, I don’t believe that effects your credit. However if you apply for the card jointly, and you own the account together and are equally responsible for the debt on that account, then it would either help or hurt your credit.
Does having a credit card with someone else help your own credit?
My boyfriend and I have a credit card to a department store. When he originally applied, the application asked if you wanted to add another user. He put me down as a user but did not include my Social Security number. I was just wondering if that helps my credit score or does it only help his? not like it matters but Just wondering.
How long should I wait in-between denied credit card applications to apply for a new one?
I am a 22 year old with no credit history what so ever. Yes, i have checked this with the creditors. I have never had any open lines of credit and no bills in my name.
With that said, I am planning to buy a house within the next couple of years and I am trying to build credit so I will not have any problems getting a mortgage. Since August 2009, I have applied to 2 credit cards. Both were denied for the same reason(s) as follows: “current account has not been used enough”, “credit limits are too low”, “available credit on account is too low” and “insufficient amount of credit is reported on credit bureau report”.
I have been told that the only way to begin to build my credit is by applying for department store credit cards or store only credit card without the Visa/MC connection. A department store credit card will do me no good as I refuse to shop at the GAP 5 days a week. So, i have decided that my next best option is a WALMART store only credit card and/or a gas station only credit card as these two i know i will use on a weekly basis.
However, what is the average amount of time i should be waiting in between each of these credit applications? My second (last) denial letter I received on October 29th 2009. Some people have told me I can apply for store only credit right away, some have said 45 days, 60 days 90 days and even 6 months!
Please help! I need to build credittttt!!!!
You should not go around applying for credit in too short a period of time, not matter if it is 30 or 60 or 90 days, no matter what, those credit applications affect ones credit scores.
Your best bet is to forget a card for now, you would do better to open a secured credit card with a credit union. You simply deposit funds into an account that they hold to cover your credit purchases. If you deposit $500 then your credit line would be $500. Use the card and pay it every month and pay more then the minimum. After about a year, you will have enough of a history to help you obtain credit cards.
When it comes to getting a mortgage, they (the lenders) want to see a history of how you make payments and how you handle your credit. They look at more then just your income. They also want to see the types of credit you have (revolving accounts, loans, and auto financing.
You could start to build your credit if you were to shop around for an auto (nothing too expensive, even a used one real cheap will help you build a credit history). Shopping for things such as auto loans, loans, student loans and mortgages done so within a short period of time will not affect your score, FICO recognizes you are “rate shopping”. FICO states within 15 days for older scoring methods. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.
You can go to the source area I have referenced to learn more on how to build ones credit, this is free info from FICO.
Hope this helps answer your question.