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On it's surface, the Best Buy rewards card looks like a pretty attractive offer. With earning rates starting at 5% cash back on Best Buy purchases, 2% back on dining out and grocery purchases, and 1% on everything else, the Best Buy advertising team deserves a pat on the back. Additionally, if you spend $3,500 a year at Best Buy, they'll bump your earnings rate up to 6% on Best Buy purchases. To the untrained eye or to someone that just really really wanted some cash back on their new 65'' LCD screen, it could be really easy to apply for this card on an impulse and regret it later. Here are 3 reasons not to get the best buy credit card:
- Reward redemption is tied to the Best Buy program, limiting redemption options
- You are likely to earn more rewards with other credit cards
- The ongoing benefits aren't competitive
Make no mistake, the Best Buy credit card does have some good features and can be the right card for the Best Buy power spender. We just think that for most people, a general purpose rewards card will serve you better. To better understand the Best Buy card, let's take a look at those rewards rates. Best Buy advertises that you will earn a percentage back on every purchase. The card attempts to come off as a cash back card, when in reality the percentages offered are only accurate if you redeem the rewards for Best Buy purchases. You won't be earning cash back, you'll be earning credit for future Best Buy purchases. This is an important feature to keep in mind. If the items you want at are more expensive at Best Buy than at other retailers the difference eats away at your earnings. Best Buy will price match in many instances for identical items, however, you may still be able to find a better price on a similar item on another retailer, like Amazon. We always say we have commitment issues. We find it impossible to save money and commit to one retailer.
The Best Buy Visa card comes in two options. Depending on your credit, you will end up with either the Platinum or Gold version of the card if you are approved. Platinum carries a $0 annual fee, while Gold carries a $59 annual fee. Both cards offer a ridiculously high 26.24% Variable APR on purchases. To put that in perspective, the average APR for cash back credit cards is 16.37% according to CreditCards.com. The cards also offer special financing for large purchases made at Best Buy, but there are plenty of credit cards that will give you a 0% introductory APR for 15-21 months, and that intro rate will apply to all of your purchases. If you're unsure of your credit score, Experian provides a good break down of what goes into a credit score. Capital One also offers a good tool that allows you to check your score for free. Applying for a card you are unlikely to get approved for will only hurt you in the long run.
What are Good Alternatives?
We know you're only here for the pictures. Let's do some math so we can put our money where our penny jar is. In the calculation below, we assume that the average user is going to spend $600 a month on their credit card. $100 on gas, $240 on groceries, $100 on dining out, $60 on electronics, and $100 on miscellaneous goods.
|Spend Category||My Best Buy Visa® Card - Platinum||My Best Buy Visa® Card - Gold||Blue Cash Everyday® Card||Bank of America® Cash Rewards Credit Card||Blispay Visa® Card|
|Annual Rewards Total||$144||$144||$146||$132||$144|
|Total Estimated Value - First Year||$144||$85||$296||$282||$144|
Keep in mind, that the rewards rate isn't everything. For example, Blispay matches up the the Best Buy card on the first year annual value, but it also offers 0% APR on all purchases over $199 for the first 6 months after your purchase. All of the cards highlighted in this section also allow for flexible cash back redemption, with the exception of the Best Buy cards. If you're looking for other credit cards that offer rewards on retail purchases, you can compare additional options here.
The Bottom Line:
With the right spending habits any card can be the best credit card for you. If you're spending $10,000 a year at Best Buy, this very well might be the best choice for you. If that's the case we also want an invite to your Super Bowl party. For most people though, a flexible rewards card with a well rounded bonus structure and a lower ongoing interest rate is going to be a smarter choice long term. Don't be a victim of impulse buying a credit card while checking out at a register.