Kohls Credit Card

We all know Kohl’s offers some great bargains, but is the Kohls credit card actually a good deal or just a gimmick? This review has the answer.

Why Kohls?
Founded in ’62, this Wisconsin-based department store now has over a thousand locations, spread across the country in all but one state. They’re now one of the nation’s largest retailers, with an emphasis on discount clothing.

But even though they may be a great place to go to pick up a sweater or pair of shoes, you may want to think twice before you apply for their credit card. Here’s why…

Rewards
Of course this is probably what sparked your interest in the Kohls credit card in the first place. They offer an incentive to reel you in and get you to apply for the card; a 10% savings on your first purchase. This is a common “deal” a lot of store charge cards offer, hoping it will persuade you to signup. Savings are always great, but don’t fall for this bait and get hurt in the long run…

You see, the reason department stores have to offer gimmicks like this to get people to fill out the application is because their cards are crap, to put it frankly. Why you ask? Here are the reasons…

The Fine Print About Interest Rates
If you carry a balance – ever – this card is going to hurt, and it’s going to hurt bad! At the time of this review, the APR is an outrageous 21.9 percent!

To make matters worse, they may give you “penalty” APR which is even higher – 24.9 percent! According to the Kohls cardmember agreement, they may give you this higher rate if you (a) make a late payment, or (b) make a payment that is returned. So if you pay on time, your paying almost 22% and if you make a late payment, you might be paying almost 25% or possibly higher!

Credit Card Acceptance
Because it’s not a part of a major payment network (like MasterCard or Discover) it can only be used at the Kohl’s department store. So it serves no use anywhere else.

Credit Record
Many experts warn that you should avoid store charge cards at all costs. Why? Because every time you apply for a store card, it results in what is known as a “hard pull” on your credit report. This inquiry is used to check your creditworthiness, but is also known to knock down FICO scores.

Also, reportedly a department store charge card may not look too good on your report. Why? Because these cards are often associated with those that have bad credit (and the only reason they’re applying is because they can’t get a major credit card). Whether that’s the case for you or not, it doesn’t matter. The bottom line is that many view them as a red flag. Is it really worth saving 10% off your first purchase if it means consequences which can hurt you in the long run?

A Better Option
You can do much better than the Kohls credit card. Instead, why not go with a major credit card that also saves money at department stores? Discover offers a card which has no annual fee and up to a full 5% cashback bonus at every department store, including Kohls! Get the full scoop and check out our Discover More review!

Chase Credit Cards Ends Forced Arbitration

The last couple decades, it seems as though we’re being forced into mandatory arbitration agreements with every product and service we use. Whether it’s doctors, cell phone providers, or banks… pretty much everyone is forcing us to have our disputes handled by arbitration, waiving our rights to take a matter to court

Why It’s Unfair
Although arbitration saves big money for the business, it’s rarely fair to the consumer. Because the company is paying for the process (and often using the same arbitrators over and over) you can guess how the rulings usually go. Add in the fact that there’s no jury and you’re only allowed to present very limited evidence, it’s not very consumer-friendly. To make matters worse, even when the business is found to be at fault, the awards are typically only a tiny fraction of what you would get in court.

A Move In The Right Direction
On Friday, Chase announced they would drop forced arbitration on their credit cards - starting in 2010 and they will do so for at least three and a half years. Why? It’s the result of a class action lawsuit filed against Chase and a number of other major credit card issuers which accused them of “secretly consulting each other numerous times with the aim of requiring cardholders to arbitrate all disputes.” In return, the plaintiffs have agreed to not hold Chase liable for this alleged practice.

This is great news for consumers and I hope this trend continues. No one should be forced to waive their rights to a court trial unless they choose to do so.

Lowes Credit Card

If you are considering applying for a Lowes credit card, you will definitely want to read this review first.

I actually prefer Lowe’s over Home Depot. From my experience, the customer service is a bit better. At Home Depot, every time I go I have to travel 10 aisles down just to find an associate to help, only to tell me that’s not their department and for me to go back and wait… it’s a huge pain in the behind to shop there.

But just because I like this home improvement store, it doesn’t mean I like the Lowes credit card. Here’s what you need to know about this card before you fill out that application.

Rewards?
I don’t know about you, but this is the main reason I love credit cards so much. I love getting cash back on my spending. I’m by no means a big spender, but over time, if you use the right cards and pay for all your purchases with them, the rewards can really ad up big time!

Unfortunately, the Lowes card offers no rewards. No points, no cash back, nothing at all. To make matters worse, those projects around the house are definitely not cheap. Just remodeling a kitchen or bathroom can set you back several thousand and up. Especially if I’m spending that much, I better be getting something back. Even the most basic cash back credit cards would give me 1% on that, so why would I pay with a Lowes credit card that’s going to give me nothing?

Interest Rate?
Okay if this thing isn’t going to give rewards, it better be giving you a darn good interest rate. Well, this is letdown #2… at the time I’m writing this, they have a ridiculous 22.99% APR. So 23% interest compounded? No thank you!

Fine Print Warning: Now this is definitely sneaky and can slip by even the most savvy shoppers. Because the card has no rewards and a crappy APR, they need a gimmick to get people to apply. And that gimmick is currently an offer for 0% interest and no payments for 6 months on new purchases of $299 or more. Sounds like a deal, right?

Upon closer inspection, you will discover that this only applies in certain circumstances: you need to pay off that balance entirely within 6 months. If it takes you even one day or week longer to pay off that entire amount, you will be charged interest retroactively starting at the date of purchase at a crazy 26.99%!

Possible Credit Score Damage?
So we’ve already established from this Lowes credit card review that there is really no good reason to apply. But did you know that applying may impact your credit? A so called “hard pull” is used to check your report, and when that’s done, it can drop your score by 10 to 30 points.

In addition, some people feel it reportedly looks bad having any store card listed on your file. The reason being is that typically they are opened on impulse, and the people that apply are more likely to be those with a bad history that would not qualify for a “normal” credit card. So whether that describes you or not, suddenly you may be viewed as such simply for having one.

Is There a Better Option?
To be honest, just about any card is better than the Lowes card. If you were interested in it because of a finance rate promotion, there are cash back credit cards which not only offer 0% for 6 months or more on purchases, but will also give you high cash back at the same time.

Visa Introduces a Credit Card on a Phone

Visa A cellphone that can charge purchases to a Visa account in Malaysia

I wrote last week about a way to make your cellphone work like a credit card by applying a sticker to the back. The sticker, equipped with a radio frequency identification, or R.F.I.D., tag lets you wave the phone over a terminal to make a purchase.

Visa is introducing a cellphone payment system that is more than sticker-thin. The service is currently available only in Malaysia, but it will be expanded to other countries in coming years.

Like some phone payment schemes already used in Japan, the Visa service uses a chip on the phone to communicate with a payment terminal. But the latest version is based on a global standard for phones and telephones called near field communications.

Here’s how it works:

• You buy a phone with the appropriate near field communication chip in it, such as the Nokia 6212.
• You connect the phone over the mobile Internet to your bank to set up your payment account.
• When you want to buy something, you wave the phone within 4 cm of the terminal at the merchant. The transaction proceeds as if you have swiped your magnetic stripe card in the terminal.

This works exactly the same as the R.F.I.D. payment systems used a bit in the United States that put tags in credit cards or on little key fobs. Indeed, the terminals you now see at fast food shops and drug stores that take the R.F.I.D. cards can also read account numbers on the new sort of phones.

But the chip on the phone adds a few features that may make buying things a bit more secure and a bit more convenient than using the existing R.F.I.D. tags or the phone stickers.

If you want, you can lock the payment capability of your phone with a password, so a phone thief can’t also go on a spending spree. Moreover, even if you don’t lock the card number on the phone, you can call your bank, which can disable it remotely.

As for convenience, the technology standard will ultimately allow you to load multiple accounts onto one phone. The program in Malaysia allows phones to be used to pay for parking and public transit fares through a separate account. Eventually, the system will allow credit and debit card accounts from multiple providers and payment brands. You need to run an application on your phone to switch the default account that is charged when you swipe the phone over a terminal.

And of course, the Visa service might appeal to people who simply think it is easier to pull out their phone at the checkout terminal instead of the card in their wallet. (Does this appeal to you? Let me know in the comments below.)

While the near field communications standard allows for the two-way transfer of information, the payment application is one-way: the phone sends its card number to the checkout terminal. No information is sent back. But Visa and other companies do have applications that send information to the phone over the cellular network. For example, some banks will let you get a text message every time your card is used. (This sort of application, of course, doesn’t need a phone with the special chip that can actually make payments.)

In theory, the near field communication standard will let your phone do other nifty things. It will make pairing a Bluetooth headset as easy as waving it near your phone, rather than futzing with codes and such. And you will be able to tap your phone to pick up airplane boarding passes or giveaways from advertising billboards, if you want a lot of promotional junk filling up your phone.

I asked Pam Zuercher, who runs Visa’s mobile group, how wide the appeal of all this will be. She demurred a bit because the product is being introduced commercially for the first time. And adoption will depend on how available the phones and R.F.I.D.terminals are. But she added that there is a cultural aspect as well.

“My read is that it will be driven by the ecosystem and the landscape of each particular region,” Ms. Zuercher said. “When we look at Malaysia, there is extremely high penetration of smart mobile devices that have the capability of hosting multiple applications.”

In the United States, Visa has tested this technology, but it is emphasizing ways of enhancing credit cards by sending information to phones. In addition to its text message service, Visa has an application available for Android (and soon other) smartphones that will let you see coupons for Visa merchants near your current location. It is also developing a nifty way to associate a short user name, or alias, with your credit card to make it easier to enter when making purchases or transferring funds on a cellphone.

Personally, I’m undecided if I want to actually make purchases with a phone rather than a card. Since my phone and my wallet tend to be with me all the time and they are about the same size, one doesn’t seem much better than the other. If it really works, I might simplify my life and use the phone more.

What do you think? Does any of this make you want to get rid of that gold card so you can say “Charge it on my phone”?