Beware of Retail Credit Cards During Holidays

As the holiday shopping season gets into full swing, financial advisers warn not to fall for retail credit cards offering deferred interest, bonuses and first-purchase discounts.

Who hasn't been roped in by retail credit cards by slick salespeople at the checkout line?  Bankrate's Chief Analyst Greg McBride urges holiday shoppers to resist the temptation.

“The average interest rate on these retail cards is nearly 26 percent, so these bonuses and these rewards programs and discounts are really only going to be beneficial if you can pay the balance in full when the bill comes,” he says.

McBride says the only thing worse is opening more than one retail credit card over the holidays.

“You don't want to be juggling multiple balances on different credit cards,” he says.  “This is the time to be getting out of debt and boosting savings.”

McBride says it all comes out of your pocket in the end, whether it's with cash today, or added interest later.

“If there is a deferred interest program, that can be pretty tempting, particularly if you're making a big ticket purchase,” he says. “But keep in mind, any unpaid balance at the end of that deferred interest period could mean that all the accrued interest since day one gets socked onto the balance there at the end.”

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