Monday, October 14, 2019 | Cloudy skies with moderate to occasionally heavy rains which may trigger flashfloods & landslides will be experienced over Ilocos region and the provinces of Batanes, Benguet, Zambales, Bataan & the islands of Babuyan.| DOH chief signs IRR of Universal Health Care | Day 1 of U.S.-China trade talks ends with hopes for limited deal | Drewry Downgrades Global Port Throughput Outlook | Miley Cyrus is dating Cody Simpson | Carlos Yulo goes up against top guns | 1 USD = 51.64 PhP as of closing Oct 10, 2019|
Consider carefully before opening a store credit card
Photo Gallery
Consider carefully before opening a store credit card

The sales associate ringing up your holiday gifts points out that if you open a store credit card today, you’ll get 10 percent off.

It’s tempting. You're making the purchase anyway; why not save some money?

That’s fine, if you’re disciplined about paying your bills on time. But you need to be careful — the average retail credit annual percentage rate is almost five points higher at 25.64 percent than the average overall card APR of 20.8 percent, according to a new report from The 2018 Retail Store Card Survey shows that 81 percent of women who applied for a retail card did so impulsively at checkout, drawn by a discount on their first purchase or other retail cardholder benefits like reward bonuses, free or discounted shipping, early or exclusive access to sales events, simplified returns and bonus reward events. But data from credit reporting agency Equifax showed that people are less diligent about managing their store card accounts than they are with bank-issued credit card accounts, and the rate of severe delinquencies on retail cards — missed payments that are at least 60 days overdue — is at the highest level since 2011.

Buyers planning a big purchase might be attracted by cards offering “special financing” deals with no interest if the balance is paid within a set amount of time. But those deals are banking on the fact that undisciplined buyers will still carry a balance when the promotional period is over and will be hit with retroactive cumulative interest at a rate of up to 30 percent. “Deferred interest may sound like a good deal, but the fine print can be extremely costly,” said industry analyst Ted Rossman.

Last year, Americans ran up an average of $1,054 in debt over the holiday shopping period, CNBC reported. Only half said they planned to pay off the debt in three months or less. Of the remaining half, 29 percent said they would take five months or more. The National Retail Federation expects holiday retail sales in November and December to increase between 4.3 percent and 4.8 percent over 2017.

The study showed that retail credit card interest rates are up 1.1 percent since October 2017. The study also found that cards co-branded with payment networks like Visa and Mastercard are a better bet than store cards since as tend to have lower APRs by about 4 percentage points. Studies show that cards that offer cash back as a perk are the most popular with consumers, but about half of rewards cardholders carry monthly balances and pay interest. About 57 percent of U.S. adults have at least one rewards credit card.