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Why 0% APR Credit Cards Are Better Than Store Credit Cards with 0% Promotions

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Why 0% APR Credit Cards Are Better Than Store Credit Cards with 0% Promotions

It is easy for skeptical consumers to assume that interest free financing offers are too good to be true. Although these offers are decidedly worthwhile, not all 0% APR credit card financing offers are the same. In fact, there are significant differences between bank issued credit cards interest free financing offers and many of the products offered by retailers.

How store financing offers work

Merchants that sell big ticket items have found that they can increase sales by offering some form of interest free financing. These offers are common at furniture stores, spa retailers, and home improvement outlets.

For example, The Home Depot offers a consumer credit card through Citi bank. It’s 0% financing offer is valid on $299 minimum purchases. Even then, customers will only have their interest forgiven if they have paid their balance in full within six months and have made no late payments. Considering the interest rates currently being offered, 17.99%-26.99%, that is a very important consideration.

Furthermore, the card being offered is merely a store credit card; it is not part of any payment network such as MasterCard, Visa, or American Express. Therefore, cards like this can only be used at the merchant it is affiliated with. In general, a standard credit card will also have a more competitive interest rate than a store credit card.  The idea is that a store credit card is usually pitched to the customer at checkout when he or she has little opportunity or inclination to compare rates. Besides, these products feature the prospect of 0% interest, and most customers believe that they will never have to pay the higher rates listed.

How credit card promotional financing works

Citi also offers its Diamond Preferred MasterCard with an ultra competitive 0% APR promotional financing offer. New applicants receive  a 0% APR for 18 months on purchases and balance transfers. In contrast, store cards never include balance transfer offers. Credit card financing offers are true interest free financing programs that do not require the customer to pay the entire balance with in the promotional period.

In other words, unlike the Home Depot credit card, a consumer who does not pay their entire balance in full before the 18 month 0% promotional period ends is not on the hook for any interest that would have accrued during the 18 month period and only pays the regular interest rate on the balance that remains unpaid when the 0% rate expires.

Considering all of the disadvantages of store cards, it is clear that promotional financing offered by bank issued credit cards is vastly superior. By understanding the key distinctions between zero percent financing from store offers and from standard credit cards, consumers can make the best decision when considering what type of promotional financing to acquire.

9 times out of 10, this means selecting a regular 0% APR credit card.

For additional information on these offers and to apply online, please see the 0% APR credit card section of our website here.

Editor's Note: This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by the Citi or any of the other companies whose products are featured in this content.

About the author

Jason Steele

Jason Steele is a freelance journalist specializing in personal finance and travel and is recognized as an expert in credit cards. He is a regular contributor to many of the top personal finance sites such as Wise Bread and Money Talks News. His work has been frequently carried on mainstream news outlets such as MSN Money, Yahoo, Finance, and Business insider.

Jason lives in Denver Colorado with his wife and two daughters.

– has written 350 posts.

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