Walmart, Target, and Kmart Credit Cards

Walmart, Target, and Kmart have all jumped on the retail store credit card bandwagon.  These discount stores are vigorously promoting their store credit cards as well as mastercard's or visas with their logos on them.  What a great way to save money you might think however, these store credit cards must be used with caution to prevent runaway spending and buyer’s remorse.

Discount stores do a tremendous amount of business, as consumers find it more convenient to get all of their shopping done in one place.  What better way to increase customer loyalty and spending than offering them instant credit at the checkout?  Target, Walmart and Kmart each have some type of discount or rewards program for using their cards, but you can incur stiff penalties for late payments and over the limit balances. Also, while the introductory rates may be low, they can quickly rise if you don’t pay on time. Alot of savvy shoppers are finding that using regular credit cards with the reward features on them can save them hundreds of dollars each year simply by offering better interest rates.

Target introduced its Redcards to shoppers with the intent of building brand loyalty and profits.  The store credit card can only be used at Target, while the Target Visa can be used most anywhere.  When customers use their Target credit cards, 1% is donated to the schools of their choice.  A 10% discount on purchases is given when you are approved the same day, and you receive the same 10% discount when you order from Target.com  Every $1 you spend at Target with your Target visa equals one rewards point, and every $2 you spend elsewhere earns you a rewards point as well.  Once you reach 1000 points, you get another 10% discount shopping day. 

Along with these benefits comes a high 21% APR that can jump as high as 25% if you have 2 late payments in a 6 month period.  The Target store credit card and Target visa are worth getting if you pay in on time every month and don’t carry a balance.  However, unless you do a huge amount of shopping on that 10% off day you will usually doo much better going directly with the card issuers like Chase, Citi an Bank of America reward cards desiged to reward good paying clients.

Kmart has a similar credit card issued by Capital One that gives you an APR of 11.9% on purchases in store or online at Bluelight.Com. Again, the low rate goes to 25% or higher if you are late paying 2 times in a 6 month period and a $25 late will apply.  Walmart offers a Mastercard from Chase that gives you 9.99% fixed APR on balance transfers within a 9 month time span.  Apr for purchases on the credit card varies depending on your credit worthiness, and ranges from 13.48%-21.48%.  Late fees and an interest rate increase to 24.49% occurs when you make late payments.

If you are a disciplined shopper and make your payments in full and on time each month, these discount store credit cards are worth your while.  Be honest about your ability to pay off the balances and research the terms and conditions thoroughly to avoid nasty surprises when your bill arrives.  Compare deals and don’t apply for the credit card at the register,  instead, take home the information and decide if the credit card is right for you.

Monica Clark