CORPUS CHRISTI, Texas — As holiday shoppers pack malls and stores, businesses are hoping people will take advantage of their store credit cards.
Many offer incentives like 50% off a customer’s purchase that day, if they just apply.
Financial experts warn that a good deal in the moment might not be so good for someone’s wallet later.
“It’s tempting with the deals they’re trying to throw out there,” Alan Krockover said. “You know, use it today and save a lot of money, etc., but usually those store credit cards have much higher interest rates than if you just had a credit card. card from Visa or Mastercard.”
Krockover, a financial adviser to Edward Jones, said such eye-watering offers should be avoided, especially ones that offer no interest for a few months.
“You just want to be careful that after that period of time, see what the rate is, sometimes the rate goes into double digits, high double digit rates,” Krockover said.
“These companies do really good business if you sign up for them,” said Ryan Cervantes. “And in the short term, they see it as money that I can spend and buy things with. In the long term though, if they don’t understand how interest rates and debt can affect them.
Cervantes teaches the basics of personal finance at Flour Bluff High School.
“I teach kids how to manage their money and not get behind an 8 ball early in life,” Cervantes said.
“I would say I’m good with money, but there are things I learn in this class every day that I didn’t know before,” Zoey McDonald said.
“They’re about to be targeted by most credit card companies,” Cervantes said. “Trying to get them to apply and give them money that they have to pay back.”
McDonald said that thanks to Cervantes’ class, she has an emergency fund.
“I smashed my phone, like, here’s the money,” McDonald said. “Either I blow a tire or someone blows my tire or I’m like oh cha-ching, so I have it in the back of my pocket, which sounds really great to me.”
Cervantes said it was up to Zoey and her classmates to be financially independent after graduation and that having the knowledge they have now can only help them in the future. .
“You don’t have to go into debt, okay,” McDonald said. “And I feel like it’s really important for people my age to find out.”
Krockover recommended people watch the fine print if they decide to get any type of credit card or try to build their credit. He said to check out websites that can help people find the right card with a low interest rate like bankrate.com.
“I think more students need to take a course like this because when they get out of high school or college, it’s now up to them to become financially independent,” Cervantes said. “And without those tools and that knowledge, it would be quite difficult.”