Tuesday, December 06, 2005

Why I hate my Circuit City charge card...

...And pretty much any other store card while I'm at it.

Simply put, I think credit cards are evil, I don't like owing people money, and with the new legislation its even harder to get out of debts you shouldn't have in the first place. Being I was an employee of Circuit City at the time, they were required to give me a card despite the fact that I had zero credit history and had just barely turned 18. I didn't want this pure concentrated evil so that I could use it to buy a PS2, but rather for the purposes of building a credit score (which within 3 years was better than my parents).

Anyway, to the point, if you were out shopping during the day after whatever recent holiday happened, then you were most likely annoyed by perky little people looking to sign you up for the store credit card. Sign up today and save 10% they say, get a $15 gift card they say, but what don't they say?

1. Anything you do with a credit card may affect your credit score, including having too many, or applying for multiple cards within a short period, or running your cards up to the limit, all can lower your credit score....I plan on owning a nice bachelor pad/home eventually, mainly as a tax shelter, but in order to own a home I'm gonna need every credit point I can get.

2.They're going to charge you ridiculous late fees, in fact they thrive off it. Most credit card companies have in that very fine print that if you miss even 1 payment (and with things being hectic during the holiday season its very likely) they will charge you a late fee, and most likely will raise your interest rates... Over 30% of their money is made from people making payments late.

3.Time-Value of money, if you've taken any economics course you know the effects of inflation and interest and compounding. So pay attention, most of these store cards may save you 15% today, but charge you a 24% APR tomorrow. Its most likely you won't pay off that store card right away, or even that Visa or Mastercard card either. They're going to make money off the fact that you don't pay it off right away.


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