topic Re: Credit Card Spree in Credit Cards

Credit Card Spree

Anonymous — Thu, 17 Jul 2008 23:15:35 GMT

So I am in the market for a new tv and rebuilding my credit. I applied for the best buy master card and was approved for $2000. I really wanted their store card... got denied!?!?!? So I tried dell and got $1,500. The best buy store card boggles my mind.

Re: Credit Card Spree

Anonymous — Thu, 17 Jul 2008 23:23:05 GMT

I'm with you on that they are funny that way. But from a business sense your more likely to spend more using the mastercard. They get both in store sales and outside usage.

Re: Credit Card Spree

Anonymous — Thu, 17 Jul 2008 23:39:57 GMT

makes sense didn't think about that. Oh well I guess I will enjoy my new tv from dell

Re: Credit Card Spree

Anonymous — Fri, 18 Jul 2008 01:47:02 GMT

huh, normally people can only get store cards and have to beg and plead to be upgraded to co-branded credit cards.

It doesn't make sense, because there is an opportunity for extra spending, yes, but I don't think they would deny in order to encourage the application for a higher tier card. There is less risk in a store card. If you only pay half the balance and default, instead of them being out $1000, they are out wholesale value of the goods they sold you minus what you paid on the balance.

So if they pay $500 for a TV and sell it to you for $1000 and you pay off $500 and then default on the rest, theoretically they didn't lose a dime. That is, of course, unless you get into time value of money, etc.

Wheras if you charge up $1000 outside the store and pay off half, then default, they're out $500.

Re: Credit Card Spree

Anonymous — Fri, 18 Jul 2008 02:39:34 GMT

thrasher865 wrote:

So if they pay $500 for a TV and sell it to you for $1000 and you pay off $500 and then default on the rest, theoretically they didn't lose a dime.

Except transportation costs, storage costs, security, employee wages, electricity for the store, etc, etc. You get the picture.

That's not quite the way it works. They have much more invested in that TV than the $500 they paid for it.

The Best Buy store card is an anomaly among store cards. It's actually more difficult to qualify for than the co-branded bank card, as OP found out the hard way, as did I many months ago.

Re: Credit Card Spree

adamseve — Fri, 18 Jul 2008 06:05:29 GMT

If you don't mind sharing, what report did they pull and what are your FICO scores?

Also, where are you located?

Re: Credit Card Spree

Anonymous — Fri, 18 Jul 2008 06:32:12 GMT

I got rejected for both the BB store card and MC in February. Reapplied last week and got a store card with a 400 CL. 670 EQ, not sure about the other scores.

Re: Credit Card Spree

Anonymous — Fri, 18 Jul 2008 12:10:18 GMT

cheddar wrote:

thrasher865 wrote:

So if they pay $500 for a TV and sell it to you for $1000 and you pay off $500 and then default on the rest, theoretically they didn't lose a dime.
Except transportation costs, storage costs, security, employee wages, electricity for the store, etc, etc. You get the picture.

That's not quite the way it works. They have much more invested in that TV than the $500 they paid for it.

The Best Buy store card is an anomaly among store cards. It's actually more difficult to qualify for than the co-branded bank card, as OP found out the hard way, as did I many months ago.

lol OK cheddar.

You're missing the point entirely. My point is, a debt against a product they sold you is less risky than a debt to someone else. Because if it cost them $1000 to get the tv into your house, they wouldn't sell it for $1000.

You're just nitpicking my extremely generic example to make me look bad

Re: Credit Card Spree

Anonymous — Fri, 18 Jul 2008 13:36:42 GMT

thrasher865 wrote:

lol OK cheddar.

You're missing the point entirely. My point is, a debt against a product they sold you is less risky than a debt to someone else. Because if it cost them $1000 to get the tv into your house, they wouldn't sell it for $1000.

You're just nitpicking my extremely generic example to make me look bad

No, I got your point. I'm not trying to make you look bad, either.

I did have a point, which was that I don't think they look at it the way you described it. A loss is a loss is a loss. A defaulted balance is a defaulted balance, whether it's on a store card or a bank card.

Re: Credit Card Spree

Anonymous — Fri, 18 Jul 2008 14:46:22 GMT

I still think you would tend to spend more with the MC. How often do you buy big ticket items? Plus you get 0% interest on most for like a year when using the store card, so they're not making tons of money off you if you pay it off. Most of the BB MC's don't give you that 0% option when you purchase big ticket items. Just my thought.

Message Edited by credit4me on 07-18-2008 10:46 AM

Re: Credit Card Spree

Anonymous — Fri, 18 Jul 2008 14:51:24 GMT

But you don't get denied because you wouldn't spend a lot. You get denied because you are high risk. No question you will spend more with the MC, because you spend in-store and out. That's not what they base denials on, though.

If you spend money in their store. They make a profit off the purchase. So if you default, instead of being cheated the full balance, they only lose the balance minus their potential profit. Still, they lose money, just not quite as much.

Plus if you are spending more on the card, you're higher risk right off the bat, because obviously higher balances are at higher risk of defaulting. Why do you think high-risk borrowers are given lower credit limits?

Re: Credit Card Spree

Anonymous — Fri, 18 Jul 2008 15:13:41 GMT

But this started with the OP get 2000 MC but denied for the store card. Now if they buy the TV with the MC they would not get the 0% for let's says 12 months. So if they gave 2000 MC why couldn't they give the same 2000 store card?

Re: Credit Card Spree

Anonymous — Fri, 18 Jul 2008 15:36:47 GMT

oh boy...

My original point WAS that they should be giving out store cards before credit cards like everyone else. And to say buying the TV on the MC is better than buying it on the store card, sure, but that's not the point. The point was with the store card you have to buy the TV, you cant go get groceries or beer. With the MC, you can. And this is risky.

Re: Credit Card Spree

adamseve — Sat, 19 Jul 2008 22:33:22 GMT

What credit bureau report did they pull & where are you located?

Re: Credit Card Spree

haulingthescoreup — Sun, 20 Jul 2008 00:06:44 GMT

Well, just to keep things stirred up, they usually give crummy CL's on their MC, and in the end, it's just another HSBC bank card that is linked to a store with high APR's. And we all know about HSBC bank cards and what fun they can be.

The store card typically has higher CL's, because it's going to be used in the stores, and their products are frequently expensive. It's going to be used for plasma TV's and home theaters, not for Slurpees and tanks of gas. (Although tanks of gas are moving toward the plasma TV range.) It has better financing deals and higher CL's.

I'd say that there is higher risk with a $2500 store card than with a $500 MC, so the store card winds up being tougher to get. This is the reverse of typical retail cards, but I think the difference is the average price tag of purchases --electronics vs a blouse.

Someone asked about CRA's: they pulled EQ for me in Tennessee this April.

Re: Credit Card Spree

Anonymous — Sun, 20 Jul 2008 15:58:47 GMT

i apply and got approve for both.

Re: Credit Card Spree

jmbfl — Sun, 20 Jul 2008 19:17:34 GMT

Details, carlos, details!