Forget about Store Credit Cards, Get a Store Debit Card

Stores are beginning to offer a new type of card to their customers… debit cards! Target and Nordstrom are the first stores to start offering an alternative to their store credit cards, which usually carry higher than normal interest rates and late fees.   These cards offer the same rewards as the traditional store cards, but instead of receiving a bill it acts as a traditional debit card and takes the money directly out of the patron’s bank account.  

What’s best about a store debit card:
Store debit cards allow customers who may be wary of signing up for a credit card or don’t have the credit to obtain a credit card to sign up for a debit card to a particular store.  The store credit cards traditionally offer additional savings for card holders and the same will be true for the store debit card holders.  In addition the debit card eliminates the worry about a bill or statement every month.  The card works exactly like a debit card where the money is drawn directly from the customer’s bank account.   Say goodbye to late fees or interest!  A store debit card may help you to control spending and save a little from the store discounts. Be aware and confirm that there are no fees to use the card or to sign up. In the end you know your credit is safe, since debit card activity is not reported to the bureaus.

What’s the downside?
The money for the purchase is taken directly from a bank account, but with a delay.  This may lead to overdraft fees and further debt problems since the money doesn’t come out right away.  You will not start saving right away.  In addition, and unlike with a store credit card that usually entices people to sign up with “instant store savings,” when signing up for a store debit card there is much more to it than just signing the dotted line.  The customer will have to fill out a form and provide the issuer things like what bank they use, routing number, and account number giving the store access to this information.  The biggest down side is that you have to have the money for the purchase in your account unlike a credit card which allows you time to pay it back.

So, should you sign up for the new store debit cards? Tell us what you think!

Leslie H. Tayne, founder of The Law Offices of Leslie H. Tayne, P.C., assists consumers and individuals with the resolution of their unsecured debts. The firm's flexible and well established policies and procedures have helped thousands of individuals lead a debt-free life. For more information, call 1-631-470-8204 or visit www.attorney-newyork.com