Who hasn’t found themselves in this situation: You’re watching your old TV and suddenly the picture goes fuzzy, or you accidently drop you laptop computer and it does nothing but hiss at you. You can’t live without either so you jet down to Best Buy in the hopes they have a sale going on and some financing you can qualify for.
You’re in luck. Best Buy always has pretty good prices, and they also have a credit card you can apply for. And, if your credit isn’t the best, it’s OK because they approve just about anybody. So far, so good. Or, maybe not. While the Best Buy credit card is fairly easy to get, and can save you in a pinch when you just don’t have the cash to replace your broken TV, it would be important to read the fine print so you at least know what you’re getting into.
Best Buy Credit Card Basics
The Best Buy credit card is issued through Best Buy by HSBC Bank Nevada, N.A. and can only be used for purchases within the store. Although there is no annual fee, the card carries a pretty high APR of 25 to 28 percent.
Usually, the card comes with a special financing offer of 0 percent interest for a period of time, typically 6 to 18 months IF THE FULL BALANCE IS PAID BEFORE THE END OF THE PERIOD. It reads in big print here, because many people miss this important condition in the fine print. More on this later.
It is offered in conjunction with the store’s RewardZone program which awards 2 points per dollar spent. If you use the card with any special finance offer, it’s reduced to 1 point per dollar. It takes 250 rewards points to earn a $5 cash certificate that can be used towards purchases.
On the surface, the Best Buy Credit Card appears to be a somewhat standard retail card that, while it may not offer the best terms around, could be good card to get in and out of the store with a new TV, especially if you have trouble qualifying for credit. But even then, it really pays to read and study the fine print of this card so you don’t wind up paying more for your TV than you bargained for. Here are some of the key provisions to study:
You may not get the card you want: Right in the fine print it says that, if you can’t qualify for the Best Buy Credit Card, you will be automatically issued an alternative card – the MasterCard Gold Card with a fee. With a fee of $39 to $59 that can be pretty expensive especially if you’re issued a low credit limit. The APR is similarly high at 23 percent.
You get a uselessly low credit limit: While it doesn’t say anything about a maximum credit limit, the fine print hints at the probably of a low credit limit by mentioning the “minimum credit limit of $300” several times. And, in fact, that’s what many people wind up getting. If you haven’t checked lately, it’s very difficult to buy a TV or a laptop for $300. And, if you get stuck with the MasterCard Gold card, your credit limit could be reduced another $59 to cover the annual fee.
When 0% isn’t 0%: Interest free introductory periods are always very enticing, especially when they stretch out to a year or more. With standard credit cards, most people know that they can take advantage of the 0% interest rate by saving money or paying the balance down faster. And, they readily accept the fact that, at the end of the period, their interest rate will go up. So be it. But, with the Best Buy Credit Card, not only does your interest rate sky rocket, it is then charged on the full purchase price plus the interest that would have accumulated during the introductory period.
Ouch! It is in the fine print, and the sales clerks may even make mention of it as you are signing the application. But most people believe that they will be able to pay off the balance in time, or at least they intend to. In reality, many people lose track of their payments and the diminishing introductory period and find themselves making a hefty payment to cover retroactive interest payments. Ouch!
Like all retail cards, the Best Buy Credit Card doesn’t offer the best of terms, and, if you’re not real careful reading the fine print, it could cost you more than you would have thought to replace that TV. And its weak rewards program doesn’t offer enough incentive for the added expense.
Of course, if you know with 100% certainty that you are going to be able to pay the balance in full, and do so, then the best you can take away is the free use of their money for a period of time and some rewards points that can pay for your next version of Call of Duty. But do proceed with caution.