They very clearly inform me on each statement just how much interest is being deferred until the point at which I screw up. :-)

These cards sure can be bad, but used correctly, they can be really great.

I have a fixer-upper house, and a Home Depot credit card. I have never paid interest on any purchases with that card.

Every few months or so, they send a coupon for no interest, no payment financing for purchases over $299. When we get one, we buy materials for our next few big projects, and then work on them throughout the year while making small payments on it. By the time the year is up, the balance has been paid.

Works great for me, but if you aren't careful and you hold the balance for the whole year, ALL of the interest for the whole year gets dumped into the balance.

Your debt to what ratio? A card with no balance REDUCES your debt to credit ratio. That said, I believe store cards are treated differently from regular credit cards, so it could end up being worse, FICO-wise.

I take the view that when stores approach me that they are willing to accept my terms and fill in the card or tell the person my terms: 5% per year, no compounding.

Their inevitable response is, "Those aren't our terms!"

To which I reply, "Then why are you wasting my time by asking? I will only sign on your terms if I approach you for a card. You came to me, so that means you agree to my terms. Otherwise, don't ask.

@SadSam:

Additionally, the APR on husband's HD CC is 21%. To maintain the 0% for 6 mos. I have to make the minimum payment each month (on-time) and pay off all charges within 6 mos. Since we don't normally have any credit card debt or bills I add a reminder to my calendar and to my budget to make sure I stay on top of the monthly minimum and the final pay off. Thus far, about 4 years of use, we've never paid a dime in interest to HD.

@kenblakely: Not everyone has the luxury of building up an emergency bank account the moment they enter adulthood, either. Self-supporting college students have to deal with substience-level conditions.

Interest sucks, but credit cards can still be used responsibly as long as there's a decent repayment plan and the person is aware of the true, final cost of their purchases.

@thelushie: Other way around...lol

@Scuba Steve: Because too many inquiries will lower your score by almost 100 points.

Applying for any of these cards will hurt your credit score. Period.

In my early 20's my first credit cards were Sears and J.C. Penny's. Each had only a $500 limit to start with and I bought the necessities I needed. Clothes and starter cookware for the most part. I never let the balance get above what I could pay off in 3 months, and I never made purchases until that 3 month balance was paid in full. This got me an excellent credit score and a Visa eventually.

The current trend of no payments and 0% interest for 12 months is a tricky beast. My wife and I did it with some furniture for my son's room with the store's credit card. What we didn't realize was that the store wasn't going to send statements after the first one if we didn't make purchases. We had to call the credit department each month to find out our balance and payment. They actually wanted you to forget you could pay off the principle before the interest kicked in.

I did apply for a HBC Mastercard (Canadian Dept Store, similar to Target) because I got 25% off what I was purchasing that day... I was approved, but they kept the limit low which was nice. It didn't hurt my credit at all. I was just approved for another low interest APR credit card just last week without problems.

But in regards to a big electronics such as Best Buy, or any furniture store... Yeah, you can get 0% financing for anywhere from 6 months to 48 months. When you ask them for that, they like to tack on "Administration charges"...sometimes for up to $199.00 just because you want to buy that new TV or dining room set on their credit card which can range from 21% - 32% APR.

You have to watch out for that, and if you are paying it in a few months, it would be best to use your credit card and get the rewards back, or use a low APR card something like 11% or so.

But, unfortunately people like to spend thousands of dollars on stuff when they don't have the financial planning to pay for their purchases. Instead of taking a $3,000 loan out because they can "buy now pay later" and make sure before they do that, they can pay $150.00 a month for 20 months and have it paid off before the 24 month no interest promo runs out, they always get statements and say "oh honey, we have a year to pay this off don't worry". The year goes buy and now they make their 150.00 payments as interest payments and never bring the principal down.

As for no interest financing, I have seen GE Money and Citi Financial the worst of the worst! 32% APR interest, thats robbery in my mind.

Sigh, but people don't read fine print, do they?

And an ammend to my last post. Macys credit is rude to employees and I had heard horror stories about the way they treat customers. We are talking Comcast employment rejects. In my time working for Macys, I had one very helpful lady. And I called them on a fairly regular basis.

I generally don't use credit cards at all (except for biz travel) but my husband uses a Home Depot CC for expenses for our investment properties. The good thing about HD is that they regularly run 0% for 6 mos (sometimes a year) and 10% off purchases over $200 specials if you use your HD CC (I'd say they run the specials at least 6 times a year). They also send him extra discounts as a CC holder.

We went to the ATM and took out above the $1000 we needed and then paid it to the credit card in the store.

Our final bill had about $200+ in first day (or two) discounts on it.

We're shredding the card when it arrives. The bill is already paid in full.

The cards are useful when you use them smartly.

One day, when we maybe complete out the last bit of the registry, if we can afford to, we'll do a joint card and play the same trick. I figured out the remaining cost for that and we're looking at $600 or so in savings if we play the game.

Second, grabbing a new store card for a 10% discount is *usually* a bad idea except in very specific circumstances. Why? because the store is gonna do a hard pull on your credit records to grant you credit. hardPulls = lowerScore = [higher Interest rates On Future Loans]+[possible rate jacking by other cards]

A hard pull on your credit report is something you should get compensated for, because there's a real cost to you. Opinions differ, but I usually won't allow a hard pull for less than an expected $150 - $200 benefit.

So....if you're buying a big ol' plasma TV for $2500 then yes; grab that 10% discount for a store credit card, then pay it off immediately or, if you're lucky enuf to get a 'same as cash' deal, pay it off as slowly as you can without incurring interest/penalties. Otherwise, be judicious with accesses to your credit accounts.....

The problem, of course, comes when folks don't pay off their balances. In fact, I would hazard a guess that the vast majority of the ways that most credit cards screw over consumers is when the consumers choose to carry a balance. Of course, sometimes you don't have a choice. There are bills to pay, perhaps a job has been lost or a bonus hasn't come through, and you have to choose to either pay off your CC balances or pay your other bills. But honestly, if you're that concerned about high interest rates and you can't afford to keep your balances at $0, why on earth are you shopping at department stores?

I'm sure the credit rates of retail stores aren't that low because they know that the vast majority of people simply just want the special deal of the moment and will almost never use their card for out side the store purchases.

I have to say that Amazon has a great deal with cards. But really in the end, all the Retail stores want is more info to sell to other people when they run out of money.

Short of that, use a credit card you trust that benefits you or *gasp* pay cash.

I know you should always use a real credit card for big purchases (for the protection they usually offer), but let's face it: These deals are tempting, and you can really screw yourself if you mess up, but they can also really work out in consumers' favor, if you're smart.