If you love a good deal, you probably shop at Costco or Wal-Mart. But what if you would love a good deal on a credit card or loan? Both discount retailers have recently launched ventures into the world of personal finance. Wal-Mart has established its own banking charter for their in-store financial offices and offers credit reports, credit cards and debit cards online.
Costco has not sought its own banking charter, instead it has partnered with a wide variety of financial service companies. Costco offers auto loans, home loans, health insurance, car insurance and investment products online for its members.
What are you really saving by signing up with these services? Probably not as much as you would think. The Wal-Mart credit card offers standard rates (11-17% APR) and Costco’s discounts on auto loans and insurance are difficult to calculate. If you are shopping for a financial service, it is possible that you could save a bit by going through Costco or Wal-Mart. In any case, you should still shop and compare rates at a variety of places before deciding who has the best deal.
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I think store credits are just as dangerous as regular cards. The store employees use all sort of tactics to make the customer want to apply for their credit card, from crappy “free gifts” to special sales. It’s easy for people to feel like their being tricked into hurting their credit by opening a store credit card. On top of it the amount of money you may save with the discount, you end up spending in interest and fees. In my opinion it’s simply not worth it.
This article is a good example of what I’m talking about
http://www.nationalpayday.com/moneyblog/?p=397