Chicago Bankruptcy Attorneys Advise Shoppers to Turn Down Store Credit Cards
Imagine this scenario: You're at a cash register being rung up for your purchase when the cashier asks if you'd like to save 20% by opening a store credit card. What do you do?
Me, I used to fall for it every time. I had so many store cards that they didn't fit in my wallet - I had to stash them all over the house. As far as I was concerned, the shop might as well have been handing me a generous coupon. How could I refuse such a good deal?
Unfortunately (especially for my credit score) there's a major catch. Store credit cards have some of the highest interest rates around - often 30% and higher. Unless you pay off your balance immediately, you're going to erase that little discount fast. But have you ever noticed that store cards also have dinky minimum payments - sometimes as little as $5 a month? It seems convenient at first, but if you're paying off something large - like the $200 iPod I once charged to an electronics store card to save (or so I thought) 15% - it could take ten years and three times the original amount to pay it all off!
And it gets even worse.
Every time you apply, the company has to pull your credit information - and your credit takes a hit. Even if you're denied! Credit bureaus catch on quick when you start signing up for cards just for the discounts. So next time you're in the market for a loan, for a house for instance, don't be surprised if you're stuck with one of the highest interest rates.
Retailers aren't exactly evil - they're trying to survive the recession just like we are. But they're not going to make a profit by giving stuff away for free. There will always be a catch - in this case, they're making a fortune off your interest. Don't fall for it.
If you're routinely making minimum payments on a lot of cards, you likely have a growing debt burden. It's almost a catch-22. In times like these, you need less debt, not more. Yet you're more apt to use credit because you don't have enough cash to pay in full. But there's a reason I say almost. There is another alternative, and it's guaranteed to work. It's bankruptcy. When you file for Chapter 13 bankruptcy, for instance, all creditor actions - including harassing phone calls, lawsuits, or foreclosure proceedings - are stopped. Meanwhile, you're able to come up with an affordable payment plan - often for much less than you owe now.
Wondering whether bankruptcy might be right for you? A professional bankruptcy attorney can help. When you sign up for our free one-on-one debt analysis, our Chicago or Atlanta attorneys will discuss the best way to eliminate your debt while answering any questions you may have. Now that's what I call a good deal.