Love at first sight comes in many forms. You could, for instance, get a spark when you see your dream couch across the showroom floor. And when you find the piece of furniture you just have to have, most stores are quick to offer you one of their credit cards to help you finance the purchase.
While these store cards can be convenient, they are likely quite different from most other credit cards you have. Before you apply for a furniture store credit card, remember these six things about them.
1. They Usually Have High Interest Rates
There are many credit cards that offer standard annual percentage rates in the 10% to 20% range. In fact, the most competitive low-interest credit cards can have a standard APR of just below 10%. Most furniture store credit cards, however, have APRs bordering 30%, so if you are planning on carrying a balance, those cards are generally not your best option. (You can find a round up of the best low-interest credit cards in America here.)
2. They Often Can’t be Used for Other Purchases
Some retailers offer co-branded credit cards that do participate in larger payment networks, like Visa or MasterCard. Those cards, usually identifiable by the network logo on their front, allow you to use the card for in-store purchases or at other merchants that accept that network’s cards. But most furniture store credit cards can only be used for purchases at their stores. You can ask the salesperson if you are unsure about where the card may or may not be accepted.
3. ‘No Interest’ Financing May Have Caveats
With most credit cards that offer interest-free promotional financing, you receive a 0% APR rate for a limited time, and the standard interest rate will be applied to any unpaid balance once the introductory rate expires. But with the financing terms of many furniture store credit cards, you accrue interest from the date of purchase, which can be waived if payment in full is completed within the promotional financing period. And, with these types of terms, if your payment is a little short or the last payment arrives late, you would still be responsible for all interest charges.
4. Applying Can Lessen Your Negotiating Power
Once you apply for a credit card from the furniture store, the salesperson is aware of your credit limit. Once this happens, you could be giving up the leverage of saying, “This is all of the money I have to spend.” To avoid this problem, you can try to negotiate your best price first, and then apply for the store credit card.
5. Don’t Expect to Earn Rewards
Many credit card users can mitigate the cost of a large purchase by earning valuable rewards in the form of points, miles or cash back. For example, there are some credit cards that offer 1.5% or even 2% cash back. The majority of furniture store credit cards, however, don’t offer rewards.
6. You May Not Get Certain Shopping Protections
Many credit cards include valuable purchase protection benefits. For example, your furniture can be covered against accidental damage and theft, or your card may offer a price protection policy to provide a refund if your purchase goes on sale later. In addition, many credit cards offer an extended warranty policy that can add an additional year to the manufacturer’s warranty. But when you use a furniture store credit card for your purchase, it’s unlikely it will include any of these benefits, and you will often be asked to purchase an additional extended warranty package.
Remember, it’s important to read the terms and conditions carefully when trying to find a credit card that’s right for you. It’s also important to check your credit before applying. Good credit scores generally help you qualify for the better products on the market and you’ll want to be sure your credit can handle a hard inquiry. You can see where you currently stand by viewing your credit scores for free, updated every 14 days, on Credit.com.
More on Credit Cards:
- Credit.com’s Expert Credit Card Shopping Tips
- An Expert Guide to Credit Cards With Rewards
- How Secured Cards Can Help Build Credit