Seemingly every major retail chain is offering a branded credit card to their customers.  You’ve heard it before - “would you like to sign up for our credit card and get 15% off of today’s purchase?” What’s a good deal for the store may not be a good deal for you. Watch out for these retail tricks and think twice before buying something you don’t need on store credit - you may end up getting more than you bargained for.

1. “You can get X% off your purchase today with our rewards card.”— These savings can be misleading.  With the average American consumer carrying more than $1000 in store credit card debt at a 26.38% interest, you may end up spending hundreds of dollars on interest to save a few bucks up front. It only takes about 7 months of interest payments on that purchase for your "15% discount" to disappear. 
2. “Would you like your receipt printed or emailed to you?”— Another chance to join their mailing list and be bombarded by email ads.  Consider opting for a paper receipt or using an email account where you don’t mind getting spam.
3. Rewards Cards and Credit Cards - Just figuring out what’s on offer can be challenging enough.   Rewards cards usually require just a name, email, and birthdate to sign up, while credit cards will require some additional paperwork.  Consider whether you have the money to pay off the store card in full every month, otherwise it will probably end up costing you more than you save.

Retailers have every incentive to try to capture your info and to get you to buy on credit.  On a busy holiday weekend like Memorial Day, the average consumer will spend $500.  In a crowded and aggressive consumer market knowing when to take out your wallet and when to put it away could be the key difference between financial capability and financial disaster.

Here are some questions to help you discuss store credit cards with your students:

• Have you ever been offered a store credit card?  Did you sign up for it? Why or why not?
• What are some tricky phrases you’ve heard from sales people to encourage you to buy products, give your contact info, or sign up for something you may not need?
• Are you more or less tempted when shopping online compared to in stores?  Explain your answer.

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Check out our Activity, CALCULATE: Shopping with Interest— also available in Spanish!—where students discover how costly it can be to pay for things using a credit card (and not paying off the balance every month).

About the Author

Danielle Bautista

Danielle is a native of Southern California and a recent graduate from the University of Maine, where she braved the frigid winters—a feat in and of itself—and earned her Bachelor's degree in International Affairs. She has a passion for working with non-profit organizations and serving populations in underprivileged communities. When Danielle isn't writing NGPF blog posts, spearheading various outreach projects, or managing contests and flash surveys, you can find her doing some sort of outdoor activity, learning a new hobby, or cracking what she thinks are witty puns!