Several times, I’ve done what is considered unthinkable by most personal finance experts: I signed up for store credit cards at the point of sale. I have a Macy’s card, which I signed up for a discount on clothing I was planning to buy — clothing that is probably overpriced in the first place. But when I was first starting to get some freelance web design off the ground after college, while working at a non-profit and in need of another source of income, I needed to stop using my roommate’s computer. My own desktop computer was insufficient for working on the latest technologies because it was about six years old and couldn’t handle broadband internet connections. I couldn’t afford a computer, but to get my business off the ground, I bought the computer with a 0% APR store credit card, having qualified for just enough credit to make the purchase possible (what a coincidence).
That card was an earlier incarnation of the Best Buy Reward Zone® Credit Card. For me, the attraction was the 12-month 0% APR offer on the store purchase at the time, and the card was not free from problems. Because of how they tend to trap you, and are used to encourage purchasing of items you cannot afford, you should stay away from store cards in general. But for those who frequent Best Buy, the latest incarnation of the card has a decent rewards program.
Keep in mind that if you’re buying your electronics and most other items at Best Buy, you’re already likely overpaying. I still manage to find good deals, but only on discontinued items when I can haggle with the manager. Unlike 1999, I prefer Amazon.com or specialty discount stores like B&H Photo and Video and NewEgg over Best Buy. The rewards program might make it worthwhile, especially if you manage to find good deals at Best Buy.
Like most credit cards offers, the Best Buy Credit Card offers an incentive for signing up, but it varies. If you sign-up in person at a Best Buy location, you may receive a discount on your first purchase using the card. If you sign-up online, there is no discount. The card also includes a rewards program. You have the option of Flexible Financing options or become a Rewards Zone Member and you may be eligible for 2.5 points for every $1 spent (that’s 5% back) on all Best Buy purchases with the card using standard credit financing, a $5 reward certificate for every 250 points, exclusive discounts and events.
The largest detraction of this card is the interest rate, which is generally higher than other cards I write about on Consumerism Commentary. The purchase APR on the Best Buy Credit Card Preferred is 25.24% or 27.99% variable. Select purchases may be eligible for a 48 month reduced rate credit plan, but be sure to check the current offer for details.
Cashiers are often rewarded bonuses when they successfully pressure or otherwise convince shoppers to open up a new credit line at the point of sale. It’s a very effective technique, and dangling an immediate discount and future discounts traps even educated consumers. I still use my Macy’s card, and when I arrive home after shopping, I access my account and pay the bill right away so I don’t get caught in any high interest traps.
As a rule of thumb, no financial decision should be made spur of the moment. The Best Buy Reward Zone® Credit Card may look good initially but its high interest rate and strict rewards program will benefit too few. Unless you are an expert at finding deals at Best Buy, you’d be better off looking into an all-around cash rewards credit card that offers big bonuses with a low interest rate and no annual fee. Offers may change frequently, and without notice so please visit referenced sites for current information.
Updated September 1, 2013 and originally published August 31, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.