Department Store Credit Cards
Easy To Get And A Good First Credit Card Even With No Credit History
Visit department stores a lot? Consider applying for a store card, especially if you've never established credit before. A look at JCPenney, Macy's, and Bloomingdales.
Should a department store card be your first introduction to credit? Yes! And here’s why:
- You can’t buy groceries or other necessities on a department store credit card. So you won’t be using it for "emergencies." That way, you’re less likely to go over the spending limit. Remember, there is no emergency worth carrying a credit card balance. Set aside three to six months salary for unexpected expenses.
- Department store cards are easy to get. If you have a telephone in your own name, are gainfully employed, and haven’t skipped out on any payments, you’re likely to qualify. Just remember, use these cards for convenience, not as a loan source. Budget your purchases just like you would a checking account. If you write a bad check, you’ll pay. If you go over your credit limit or carry a balance, you’ll pay even more.
- You might qualify for points and special sales. Department store card holders are often privy to sale events before the general public finds out. You may also be able to rack up points toward future purchases. But beware; don’t spend more than you have just to establish points! Store card holders are often the first to receive coupons in the mail. And you might be eligible for special services as well, such as layaways and phone orders.
Read the fine print.
It may look straightforward, but make sure you find out if there are any fees associated with the store card. The questions you should ask include:
- Is there an over-the-limit fee?
- What is the interest rate?
- Is there an annual fee?
- What are the late charges?
Which department store should you choose?
The one where you shop the most. Macy’s, Sears, Bloomingdales, JC Penney, even Home Depot, all work the same way. What you’re applying for is a revolving line of credit. If it’s your first card, you’ll probably receive a low credit limit. That’s a good thing, because you don’t to want to spend anywhere close to that ceiling.
Interest rates on department store credit cards are often much higher than a Visa or a Mastercard. So pay your bill in full every month and on time! Mail a check at least a week before the due date. If you’re paying online, allow at least two days for processing. After months of late or non-existent payments, your account will get sent to collections. You don't want that on your credit report. Remember, there's no need to borrow money to build credit, so pay the entire balance every month. In fact, your next credit card should be one that pays you, either in the form of cash or gift cards.
