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06-08-2012, 12:13 PM #1
Sears Credit Card Warning - Why To Avoid This Card
Important for 2013: Read our Sears Credit Card review BEFORE applying for this card. There is a much better alternative which is highlighted below!
Thinking about applying for the Sears Credit Card? You might want to think twice. There are numerous problems with this credit card, including it's high interest rate, terrible customer service and lack of any real benefits.
We have been getting a lot of questions about the Sears card, so here is a short summery that will save you a lot of time and wasted money. Do not apply for the Sears Credit Card, and if you already have one... cut it up and get a better card.
The new Discover it card is a much better rewards credit card that gives you cash back on EVERY purchase you make. You can also earn up to 5% cash back on popular categories that rotate like gas and groceries. You can read more about Discover it and apply here.
Here's a look at the major problems with the Sears credit card, and why you're better off finding a better credit card for your purchases.
1. Applying Can Hurt Your Credit Score
There are actually three versions of the Sears Credit Card: a general store card for purchases at Sears and partner stores, a store-sponsored Mastercard and a credit account for major purchases. Store employees receive a bonus when you apply for a line of credit, whether you're accepted or rejected, and many associates will try to enroll you in all three credit programs at once to receive a larger bonus. Often this is done without your knowledge and each credit application will cause your credit score to take a hit, as lenders view multiple credit requests at once as a sign of financial problems.
2. Tons of Fine Print and Hidden Fees
Sears cardholders frequently receive financial offers if they make a large purchase, such as "no interest if paid in full in 12 months." While this no-interest promotion can sound like a great deal if you're buying a new stove or big-ticket item, read the fine print first. If your balance isn't paid in full by the end of the promotional period, all interest charges will be imposed from the date of purchase at 25.24% APR. This type of retroactive interest promotion can be disastrous if you're even one month late to pay off your purchase and leave you with hundreds or thousands of dollars suddenly appearing on your balance.
3. Big Lack of Benefits
The Sears card doesn't even impart any real rewards to the cardholder, either. There are no rewards earned with the regular Sears credit card, unless you qualify for the Sears Mastercard, which is still subpar. This credit card does offer something called a TransUnion TransRisk, which is a credit score that can help you get a fairly good measure on your credit situation. Still, it isn't a real FICO score and isn't worth much. If you are really interested in your credit score, use MyFICO instead.
4. Crazy High Interest Rate
Like most store credit cards, the Sears credit card also carries a very high APR of 25.24%, which will shoot up to nearly 30% if you make even a single late payment. Considering the lack of rewards or other benefits, there's no reason to apply for a credit card with such a high APR. Even individuals with poor or recovering credit can qualify for better cards, which is just another reason to avoid the Sears card at all costs.
5. Terrible Customer Service
Unfortunately, the Sears customer service department seems to be one of the worst around. Here's a look at some situations customers have encountered with their Sears credit card:
- Online bill-pay down for months at a time and other online issues
- Late fees charged after bills paid on time
- Difficulty reversing late fees charged in error
- Uninformed representatives unsure how to handle situations
- Fees aren't divulged over the phone
- Free delivery with rebate not honored
- Daily phone calls to pay a bill that was already paid on time
- Interest-free promotion not put into place after purchase
Final Word on the Sears Credit Card - Important!
The Sears credit card is worse than most store cards and its only real benefit is helping you rebuild your credit. If you do choose to sign up for this card, avoid carrying a balance at any time, carefully pay off any balances before a promotional period ends and hope no mistakes occur that cause you to turn to the customer service department. Still, if you are trying to rebuild your credit or want to finance a large purchase, look for another card with a better interest rate.
The Better Option: Instead of getting stuck in the mud with the Sears credit card, we recommend the new Discover it Card. Discover it gives you up to 5% cash back on your purchases, with no hidden fees and no annual fee. With this card there is also no fee the first time you miss a payment and your interest rate won't be increase - making it a much better choice than the Sears credit card.
Last edited by CreditDave; 03-06-2013 at 12:40 PM.