Why I opened a store credit card
I bowed to pressure and broke my personal rule never to open a store account. Here's what happened.
Remember, dear readers, when I warned you about store credit cards last year? I told you about a study that found that 35 major New York City stores had an average interest rate of 23.83% on store cards, when the national average APR for a regular credit card was at 14.78%. (RadioShack had the worst rate at 28.99% APR, with Best Buy and Staples close behind at 27.99%.)
I told you, quite proudly, that when asked if I want to open a store card account, I always tell the cashier, "I don't carry store credit cards," and I repeat myself as many times as necessary.
I told you, "… it's important to be on guard. By and large, these cards aren't worth the hassle or the risk. Credit is serious business, not something to sign up for on the spur of the moment without reading the fine print."
Well, this is the story of how I got suckered into opening a store credit card and what I learned from it.
It was the best of experiences, it was the worst of experiences …
Recently, I ventured into Neiman Marcus for the first time. It was the only brick-and-mortar store that carried the stuff I wanted, so I drove out of my way to go there. The salesperson who helped me was probably one of the best I've ever encountered. She knew I wasn't spending much -- about $60 -- but she spent a considerable about of time helping me.
She was friendly and extremely knowledgeable, and showed me other products she thought I'd like without pushing me to buy more. Instead, she offered to send me home with samples of her additional recommendations. As she put everything into a bag, a second salesperson helped to start the checkout process, which went something like this:
Salesperson No. 2: Do you want to put this on your Neiman's charge card?
Me: No, I don't carry store credit cards. (I hand her my MasterCard.)
Salesperson No. 2: We don't take MasterCard, but it takes just a few minutes to open a store account.
Me: No thanks, I don't open store cards. Can I put it on a Visa debit card?
Salesperson No. 2: We don't take Visa either.
Me: If you don't take Visa or MasterCard, what do you take?
Salesperson No. 2: We take the Neiman's card, American Express, cash and checks.
I didn't have enough cash on me, I don't carry checks, and I don't have an American Express card. The first salesperson seemed too uncomfortable to push me into opening an account, so salesperson No. 2 continued with the pitch, telling me most of what I knew already -- that I won't have to pay interest if I pay my balance each month, and that the card comes with all kinds of "fabulous" rewards. She also told me that Neiman's will never sell my personal information (this, of course, turns out to be false).
The lowdown on Neiman's
I found out later that Neiman's does take Visa and MasterCard, but only for online purchases. It was even willing to temporarily relax its rules during Super Bowl XLV "to make it easier for customers visiting from out of town … or from cities that don't have a Neiman Marcus store." Gee, how thoughtful!
According to Slate, Neiman's private-label credit card corner was one of the most desired parts of the business when it sold during a 2005 auction (HSBC purchased the credit card portfolio in mid-2005 for $640 million.) At the time, there were 562,000 active users paying 15% APR -- generating about $550 million in receivables for the company.
I knew store credit was big business, but I'd never encountered a store that doesn't accept major credit cards to push customers into opening a store credit line.
Back to my in-store experience: I was feeling cornered and conned. My first thought was to walk away. Now that I knew exactly what I needed, I could purchase the item from another retailer online.
But here's the thing: I wouldn't have known what to buy if it hadn't been for salesperson No. 1, the person who spent a lot of time helping me even though she knew I wasn't spending much money. She more than earned a commission, and I felt bad about walking out. There weren't any ATMs nearby, and I had an appointment in about 15 minutes. I was feeling pressured. On the other hand, I was mad and felt as though I'd walked into a trap.
I caved, and I opened the account to make the purchase. But I'm calling Neiman Marcus to pay the balance and cancel the card.
I know Neiman's won't miss my business -- I'm hardly their target customer. For example, one of the benefits of "Circle Two" membership (for the busiest of Neiman's charge card users) is fur storage, which made me giggle. I'm the kind of gal who worries that someone might mistake her faux fur coat for the real thing. The cover of the InCircle member brochure asks, "Are you a member of the in crowd?" Uh, no. Not usually.
In retrospect (and sarcasm aside), there were better ways to handle the situation that would have given the salesperson credit for the sale and would have avoided me opening a store card I absolutely do not want.
When I told my husband what had happened, he had the perfect solution: "You could've asked the salesperson for her name and told her you'd come back to pay in cash."
Yes, that is exactly what I should have done. But when I was in the situation, I wasn't thinking clearly. I felt pressured and irritated, and that I had to make a choice right then and there, when I really didn't.
(Also, I was reminded that I should carry at least one paper check with me. I used to do this, but fell out of the habit because it was so rare that I ever needed one. Now I've tucked one into my wallet again to have one more payment option.)
I never, ever thought I'd open a store card. I'm disappointed that I let it happen, but at least I can amend the situation. I certainly now understand, from firsthand experience, how tricky retailers can be when it comes to pressuring consumers into opening store credit cards.
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Ok April.... You made no mistake! Quit being angry with your self! Here is the deal:
1). If you can't control yourself with a credit card at this stage in life, you, more than likely, have
many more 'worse' issues going on..
2). Put that card away, forget that you have it, and when 'Needless Mark-ups' wants you back, your
discount will be just terrific!
3). Understand the value your money has to you as long as it is in your pocket. You are in
control... never give that up!
4). If there were some dire emergency and you had to purchase something, and if you could
not repay the debt, would you prefer the money lost to be Visa's or yours?
5). Just be smart, be responsible, and be worthy of people placing their trust in you!
Now, go out there and demonstrate restraint! Demonstrate the way people 'should' live even with all the temptations life throws at you. Be the role model that people can believe in and emulate! Teach people to be trustworthy at all costs.
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