old navy interest rate switch

[leahjoy79]

if i have never used a card i applied for and received because the interest rate was not as advertised.  (it was much higher)  i immediately shredded card upon receipt. should i call old navy and cancel it?  how badly will that hurt my score?  do companies negotiate rates?  how do i get old navy to lower the rate on this card to what the person in the store said it would be?

[Jlu]

Don't cancel it. There is no annual fee. If anything just keep it open and PIF if you happen to use it. Otherwise you will get hurt by an inquiry and AAoA for no reason. Don't be foolish.

[Jlu]

You shouldn't be revolving credit on a store card anyways. It is frowned upon. It's the reason store cards have 20%+ APR's.

[rootpooty]

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@Jlu wrote:

You shouldn't be revolving credit on a store card anyways. It is frowned upon. It's the reason store cards have 20%+ APR's.

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bam ding ding ding! BINGO! lol excellent advise right here who cares what the apr is on a store card just use it for the discount if its offered and PIF the thing.  If you close the account you wasted an inquiry for nothing

[leahjoy79]

thank you so much for responding but what does AAoA mean?  i will take your advice and leave it open but i won't use it.

[Jlu]

AAoA = Average Age of Accounts. It is a large part of your FICO score. When you open a new account the average age of your accounts go down. The older your AAoA is, the better, for scoring purposes. For example if you have 1 account that is a year old your AAoA is 1 year, but if you open a new account your AAoA goes down to 6 months. If you close your Old Navy account then that account will report on your CR for 10 years and will never get any older than it is now - which will hurt your AAoA in the long run.

[Jlu]

The only thing you should be financing are assets (cars, homes, real estate etc). You should never buy anything in a store that you do not have the money in your bank account to pay for. Like the poster above said, use it for the promo and PIF.

[tcbofade]

The above logic may hold true for Old Navy, but is not always the case.

My wife has a store card that lists it's APR as 18%.  However, they very regularly have "sales" that involve zero percent interested deals for x amount of months.

We bought a washer and dryer there nearly two years ago...paid zero interest....we purchased two beds and a television there last year...paid zero interest...recently purchased a sofa there, and have 35 months to pay for it with zero interest.

Sometimes, it is OK to carry a balance on a "store card"....just make sure that you're aware and paying attention.