Wednesday, January 11, 2012

Store Debit Cards

I stay far, far away from most store branded credit cards because, more often than not, the terms of such cards are horrible.

But, did you know that Nordstrom and Target both offer a store branded debit card?

Nordstrom is one of my favorite stores, great quality merchandise and the best customer service.  I have friends who live by their Nordstrom credit cards, because the rewards are so great, but I have always said no, no, no to a Nordstrom credit card.  In fact on a recent girls trip, one of my friends paid for my Nordstrom purchases with her Nordstrom credit card because she wanted the points (I gave her a check).  I understand that the Nordstrom rewards program provides two points for every dollar spent, and when you hit 2000 points you get a $20 Nordstrom note.  So basically once you spend $1000 you get $20 back which doesn't seem that great.  But, and this is why my friend paid for my purchases, if you make your purchases during double or triple bonus point events they can add up quick.

The Target debit card provides 5% discounts (just like the Target credit card) on purchases.

So, how do these fancy new cards work?  First, you can only use the debit cards at the particular store.  With your debit application you supply a voided check our a routing number and the store submits a transaction, like if you use your debit card for an online purchase, utilizing same.

Upside for these types of cards? no debt and rewards galore.

Downside for store debit cards? possible overdraft charges and increased spending to obtain said rewards.


Hops said...

I dislike store-branded credit cards for the same reasons as you, so I was intrigued when Target introduced their debit card. We signed up for one last year even though we don't do the bulk of our shopping there and so far it's been great. An added bonus is that when you register your card you can select a participating K-12 school to which Target will donate 1% of your REDcard purchases. It might not add up to much but it's still a nice idea. (And don't forget to bring reusable bags when you shop there. They'll take five cents off your total for each bag you provide.)

Sam said...

Hops, thanks for sharing your experience. Have you had any problems with the link between your Target debit and your checking account, i.e. overdrafts or other negative impacts on your checking account?

Hops said...

Hi, Sam. We've experienced no problems with the link between the Target debit and our checking account whatsoever. This is the only store-specific debit card I've ever used, so I wasn't quite sure what to expect, but it's been entirely hassle-free. (Should that ever change, I'll find this post again and make note of it here.)