I was reading an article on consumerist.com today about how various banks are introducing new fees and tighter restrictions. As I got in to the article, I noticed that most of the examples given were for store credit cards - you know, the type of credit card that you can only use at a particular store - like a Sears card or a Macy's card.
It amazes me that people still use these. Most of them have some kind of ridiculous rate, like 22%. There's no cash back, miles rewards, or any of that stuff. They often have low limits and, again, they can only be used at that one store. Why would you use that instead of a regular card like a Visa or Mastercard or something?
The only reason I can really think of that's somewhat justifiable is that you don't have good enough credit to get a regular card AND you're so broke that you're coming up with creative ways to get stuff done - like getting tires at Sears so you can put it on the card. Ignoring the fact that it's a really bad solution, sometimes it's the only solution and I get that.
So beyond the economic bottom of the barrel, is there another reason for having a store credit card that I'm missing?
Consumers are kind of dense.
By the way, if you're using a credit card that doesn't give you miles or points or dollars for your usage, then you need to switch now. If you do some research, you'll find that whatever your rate is on your current card, there's a probably a card out there that can match it and will give you some sort of incentive back in the form of miles or points. YOU ARE ALREADY PAYING FOR THIS STUFF, because the cost of it gets passed on to the merchants, who in turn adjust their prices accordingly. the only difference between you and me is that I'm closer to getting my money's worth.
For me, my favorite card is my American Express Blue card, which in about a year or so of use has gotten me around $700 in free travel (airline tickets, car rentals, etc..). I also have a Capital One card which has a really high limit and decent interest rate, for huge stuff.
