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3 Reasons to Say 'No' to Retail Credit Cards on Black Friday

Creditnet and other leading consumer sources say that you should stay away from the retail credit cards you're sure to be offered this Black Friday. With high interest rates and risky spending incentives, retail credit cards can be a credit killer.

San Diego, California (PRWEB) November 23, 2012

Consumers planning on doing some shopping on Black Friday are likely to be offered any number of credit cards tied to their favorite retailers. On the surface, these credit cards seem pretty harmless, and there's a good chance customers can save some serious coin on their Black Friday purchases when they sign up on the spot.

While retail credit cards might seem like a good idea at the time, their limited rewards and high interest rates can combine to make them some of the very worst credit cards on the market.

So, when their turn finally arrives at the checkout counter on Black Friday, Creditnet.com gives consumers three reasons to say "No" to on-the-spot retail credit card applications.

1.) Retail credit cards often have high interest

By and large, retail credit cards have higher interest rates than the average credit card. Much higher.

According to Forbes among others, interest rates on the average retail credit card hovered around 24%, and these high rates were passed on to good credit and bad credit consumers alike.

Considering that the average interest rate on a credit card for a good credit consumer is closer to 15%, consumers that sign up on the spot for a store-branded credit card could be settling for a card that's short-changing them when it comes to interest.

2.) Poor intro periods

The best time to own and use a credit card is often during the intro period. Credit cards offer everything from 0% APR for a year or longer on purchases and balance transfers during introductory periods. Retail credit cards, on the other hand, are far less generous.

In most cases, the introductory period on a retail credit card basically amounts to that first purchase made, which can net savings of 15% to 20% depending on the retailer.

From there, consumers can expect to pay interest in the high-20's if they're not paying back their bill on time. And since too many credit cards can harm a credit score, by the time a consumer discovers the drawbacks of their store-branded credit card the damage has already been done; they now have yet another credit card attached to their history that they simply won't plan on using outside of that particular retailer.

3.) Limited rewards value

Aside from the discounts you'll receive within that store, retail credit card rewards are extremely limited.

It's no secret that the idea behind a store-branded credit card is to get you to shop there more; that's the whole idea. However, given the limited rewards programs outside of the store and the high interest rates, consumers really have no incentive to use the card outside of the store.

In the end, consumers are stuck with a credit card that has limited rewards, a high interest rate and a poor intro period. Take off the trusted brand attached to the card and consumers can see what a retail credit card really is - a below average credit card that we should all say "No" to this Black Friday.