The Basics of Catalog Credit Cards

Catalog credit cards are just like regular credit cards in that they are used to purchase goods now and pay for them later. For the majority of catalog credit cards, interest is only charged if the balance is not paid in full by the due date. In most cases, catalog credit cards come with no annual fee but you'll want to check the terms and conditions for complete details.

Depending on the department store or catalog company you obtain a credit card from, you'll have a specified credit limit and agree to pay a minimum amount each month on your charges. While catalog credit cards and department store credit cards can help your credit, make sure you don't go overboard. With most catalog credit cards having lower credit limits than traditional charge cards, you risk tying up your credit for a small number of spending limits. 

Aside from convenience, catalog credit cards also often offer rewards for using it to pay for your purchases at their store. For example, Gap, Old Navy and Banana Republic offer great spending rewards and most department stores also offer an immediate discount when you first apply for their credit card.

Carrying a small balance on the department store cards or secured card isn't a bad idea because it shows that you can handle an outstanding balance. This isn't to say that you should enroll for every catalog or department store credit card available to you. Avoid credit cards with high interest rates or a lack of rewards because you're only walking around with a high priced brand name at this point. 

Some pros of champion department store and catalog credit cards:

- Opportunities to establish credit. 

- Requirements to qualify are often less stringent than traditional cards. 

- Lower credit limits might make it difficult to get in over your head on spending. 

- Special financing offers usually apply with department store and catalog cards because you often get discounts, reward points, special services, and more. 

- Aside from introductory discounts, many department stores offer special sales and savings events solely for cardholders. Catalog and department store charge cards caveats:

- Interest rates are often much higher than major credit cards. If the perks don't outweigh the finance charges then you'll want to make certain that you pay off the balance every month. 

- Don't treat the credit card as a way to get merchandise for cheap. By the time clothes go out of style, you'll still be paying! Use them for convenience, not as an excuse to shop. 

- Opening lines of credit can negatively affect your credit rating. Too many open credit cards can send a red flag to potential credit grantors.

Ideally, be selective when choosing department store or catalog credit cards, and limit yourself to applying for two or three cards for every 6-12 months. We've lined up some great offers for catalog credit cards and invite you to check out the many benefits associated with each!