When You Should Choose Credit Cards for Large Purchases Instead of In-Store Financing

When people are faced with a large purchase that they intend to finance, they will often choose to carry the item on a store plan rather than on their own credit card. This is often due to the psychological illusion that they are not really spending their own money, like they would be if they were using their own card. However, this isn’t actually true and there can be some major benefits to using your Visa or Mastercard for a large purchase instead of using the available store credit program, and can actually end up saving you a great deal of money.There are some benefits to using store financing. First, it is quite convenient, since it literally only takes minutes to sign up and get approved for it, and sometimes those who have a store credit card will receive information on sales earlier than others, as well as new merchandise or other information. There may be financial benefits as well, with those who have a store credit card receiving further discounts on purchases and if you visit a store regularly the you will likely pay the balance off each month so that the interest doesn’t break the bank.However, most of the time the store credit service is not the best option. First, the store credit card usually has a great deal higher interest rate than your own plastic. In fact on average, most cards have an APR of 16.82% while in-store financing has an interest rate around 24.3%. This is obviously a huge difference if you are making a large purchase such as a television or a set of furniture that you are paying for over the long term. In fact, on a thousand dollar purchase this can be a several hundred dollars as opposed to around $150 for the average credit card.If it comes down to a choice of actually getting a credit card or a store card, to make this very large purchase then the solution is equally as clear. If you get a store credit card to make the purchase that you want, then you will certainly be able to buy your large product at the store. However, once it is paid off and you have a clear balance on your card again you are restricted to future purchases at that store alone. But, if you get a credit card instead, it can be used anywhere that the credit card imprint is accepted, which is nearly every merchant in the world for Visa and Mastercard imprints.There is a very good reason that store clerks and managers are trained to offer you an in-store finance plan when you are making a large purchase, so be aware that you will be approached, and the benefits of the store credit card will be extolled. They will often take the additional step of offering you discounts on your purchase by signing up for, and putting your purchase on the store credit plan, but just because you will receive a discount doesn’t mean that you should automatically sign up for the store financing. Instead, weight the cost after the interest and consider taking a day to think about whether you want to finance your purchase through the store or not.

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