Pitfall, Anyone?
Written: Jul 13 '04 (Updated Jul 14 '04)
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Pros: Interest-free payments for up to 2 years.
Cons: Billing dates and website seem to be conspiring to "trick" the consumer into making mistakes.
The Bottom Line: The wildly variant billing dates and differing information on the website as to whether I owe money or not makes me uneasy. Basically, I have to outfox them.
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| frazzledspice's Full Review: Best Buy Credit Card (Household Bank) |
The Best Buy Credit Card is best known for one phrase--”interest-free payments.” They currently offer four different types of interest-free payments:
- 2 years interest free on “qualifying purchases.”
- 1 year interest free on “qualifying purchases.”
- 6 months interest free on purchases of $299 and up.
- 90 days interest free on all other purchases.
Purchases will be interest-free if three conditions are met:
- A minimum payment of $10 or 2.25% of the balance is made each month.
- Payments are never late.
- Items must be paid in full by the end of the promotional period.
If all those conditions are not met, interest is charged from the date of purchase. That interest is steep. As of July 1, 2004, the variable rate is 19.8% (prime rate plus 14.4 percentage points.) The variable default rate (which, presumably, would be used if payments were not made in a timely manner) is 23.8% (prime rate plus 18.4 percentage points.)
In short, if you bought a $500 computer on the one year interest-free plan and your debt was not paid in full by the end of the term, you would owe 19.8% interest from the date of purchase.
What’s a customer to do if he is juggling several Best Buy purchases with different promotional interest-free payments on his card?
If a customer has made three purchases on his card--a $500 computer on the one year plan, a $300 clothes dryer on the six-month plan, and a $45 DVD boxed set on the 90 day plan, “certain rules apply to the allocation of payments.” If a customer is juggling several payments, he should call 1-888-367-4310 or review his cardholder agreement to ascertain how to pay off his debts before finance charges apply.
Who Should Use the Best Buy Card?
Customers who are well-organized and disciplined, and who are willing to trade some inconvenience for some savings, should use the Best Buy Card, which offers good value to careful consumers.
I applied for a Best Buy Card when our clothes dryer needed to be replaced, choosing to pay it on the 6 month plan. After receiving the card, I decided to pay off the dryer in three equal payments.
When I received my first bill, I was surprised to see that the first payment was due very quickly--in less than a week. I paid it immediately through online banking.
My next surprise was that the second bill I received had a payment due date at a completely different time of the month (about six weeks after the first payment was due.)
Being a creature of habit, I am used to having certain bills come due on certain times of the month, and felt a little uneasy that the Best Buy Card bills didn’t seem to have a fixed payment date. I knew that this would make it harder for me to remember to pay the bill (and perhaps that’s what Household Bank, the issuer of the Best Buy Card wants.) I knew it would take extra vigilance on my part to avoid loads of retroactive finance charges.
At that point I knew I would have to sign up for:
Best Buy Online Customer Care
Customers have to conduct an extensive search of the Best Buy website to enroll in the Customer Care program. There is an invitation on each credit card bill directing customers to the best buy.com website. By scrolling down to the very bottom of the website, and looking under “Shopping Services,” they will find “Best Buy Credit Card.” At the center of the following page, there is a red box for “manage account.” Customers are then transferred to Household Retail Group’s website and invited to enroll. (This isn't very easy to find.)
The Customer Care site is very skeletal, but it allows customers to:
- pay bills online.
- view current balance, amount due, and due date.
- check recent transactions.
While customers can’t see entire bills, they can see “monthly summaries.”
When I checked my “monthly summary” against my “account overview” the monthly summary said a minimum payment of $10 was due, while the account overview said no payment was due…..
That’s odd, and yet another reason why I am not entirely comfortable with the Best Buy Card. It’s almost like playing a game of “Pitfall.”
Customers who enroll in the online payment service on the Best Buy site can set up payments anywhere from 2 to 364 days in advance. If payments are scheduled two or more business days in advance, there is no fee for paying online. $15. Is charged for “rush payments” which can be paid as late as 10 p.m. CDT on the due date.
The Customer Care site doesn’t have any notifications of sales, e-mail reminders, etc. To view specials and sales, one must go back to the Best Buy site.
How I Plan to Use My Best Buy Card
At the moment I intend to use my Best Buy Card for large purchases only, made and paid for one at a time. I will use my debit card when making small purchases at Best Buy.
I will make sure to pay the bill in full with a comfortable time cushion for the interest-free option.
When I receive a bill from them, I will set up an online payment immediately, scheduled to be paid several days before the bill is due.
And right now, since one part of the website says I owe nothing this month and another says I owe $10, I will pay the $10, just in case.
I am taking many more precautions than I take when paying my other bills, because it seems as if they are necessary.
Pitfall, anyone?
A Last Consideration
If a customer makes that big Best Buy purchase on many Gold or Platinum Visas or Mastercards, he can double the manufacturer’s warranty by registering his products with the credit-card issuer or keeping good records.
Customers who want an “extended warranty” might do better foregoing Best Buy’s credit deals and getting a free extended warranty by using a Visa or Mastercard that offers this benefit. As many consumer specialists have noted, the extended warranties customers purchase from Best Buy are usually no bargain, and account for much of the company’s profits.
In addition, they will save themselves the trouble of trying to remain current in their payments while coping with different billing and payment dates each month, and different information on different parts of the Customer Care site.
Recommended:
No
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