I have a credit card from one of the big home improvement stores. When I bought my first home four years ago, I figured I needed a credit card from one of the big home improvement stores in case I needed emergency repairs or supplies for my home. Knowing then what I know now, I would have setup a special savings account for home repairs.
I bought several things over the first two years with the promotions the stores would run. Make any purchase over $299 and pay no interest for six months or twelve months. Of course, I would never pay the balance off before the promotion ended and would end up paying more interest than I saved over the course of the promotion.
When I decided I wanted to get out of debt, this was one of the cards I paid off first. I've had a zero balance on this card for over two years. I've used the card since I've paid if off but promptly paid the balance in full the next month.
Lately, the big home improvement store has been sending me 2-3 coupons a month advising I can save 10% since I am such a valued customer. This is nice but the only way they will let me save 10% is if I use my credit card and I can only save up to $200. If I am such a valuable customer, why don't they let me use whatever method I want to pay for my purchase?
And why can I only save up to $200? Where do these coupons end up? In the shredder along with my pre-approved credit card applications.
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Most of the time those offers are generated by the Bank that owns the card account, like HSBC or others.
It is a trap!
They know most don't pay off right away so they can offer x discount. The amount is based on what they think it could potentially cost them to fulfill divided over the group offer. It is called breakage!
Run Forest!
Don't throw the baby out with the bathwater. If you know you would be buying something from there anyway (and have the money saved up), use the coupon and card to save 10% then pay it off immediately.
I use a Kohls department store card. It has worked great for me. I do use the card to use their coupons. But I immediately give them a check for the same amount to pay my card. This ensures me to get the discount and not forget to pay the card.
Great job taking advantage of a credit card rewards program! As long as you pay off your balances before the 0% APR ends and don't carry an excessive amount of debt - reward credit cards are great!
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