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, 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 which is quite lucrative when compared to others. Here’s how points are earned:

• Earn two points for each dollar spent at Best Buy and BestBuy.com.
• Earn one point for each dollar spent on dining and grocery purchases.
• Earn one point for every two dollars spent everywhere else MasterCard is accepted.

When redeeming your rewards points, 1,000 points are worth a $20 Best Buy gift card, so you’re effectively earning a cash back rate of 4% when you shop at Best Buy, 2% when you buy gas or groceries and 1% on everything else. This isn’t true cash back, though, because the rewards must be used at Best Buy. Still, the offer isn’t bad for a store credit card.

The largest detraction of this card is the interest rate and fees, which are generally higher than other cards I write about on Consumerism Commentary. The purchase APR on the Best Buy Credit Card is 17.99% to 22.99% variable. If your credit history is less than excellent, you may receive the Gold version of this card, accompanied by a $59 annual fee. Otherwise, this card does not carry an annual fee. There is no introductory offer either, so there is no reduced interest rate for balance transfers or purchases.

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.

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