If you’re a fan of tech and Best Buy is your first destination for new equipment, this credit card might be a good fit for you. However, it is rigid.
Best Buy, the playground of electronics provides two co-branded store cards that allow customers to earn points when they buy at the store. Carrying one makes sense if you spend most of your electronics buying there, particularly considering how pricey items like cellphones, HDTVs, and laptops can be – and how rapidly they become outdated.
However, rewards are exclusively redeemable at Best Buy, and although the cards provide deferred-interest financing for some purchases, a real 0% intro APR deal would be a better choice in most circumstances. There are also more reward credit cards that provide more versatile and adaptable benefits.
Here are five facts concerning the Best Buy credit card that you should be aware of.
1. Best Buy offers two basic credit cards
You can apply for a Best Buy credit card in-store or online, but the procedure is a little confusing. In essence, there are two fundamental versions:
My Best Buy Credit Card. This is a “closed-loop” shop card, which means it can only be used at Best Buy and BestBuy.com. There is no yearly cost.
My Best Buy Visa. This is an “open-loop” credit card that may be used everywhere Visa is accepted. The only noteworthy variation between the two versions of this card is the yearly charge. Best Buy will inform you which one you’ve been accepted for when you submit your application:
- Gold. The yearly charge for this edition is $59.
- Platinum. There is no yearly cost for this edition.
According to Best Buy, when you apply for a card, you are first considered for the My Best Buy Visa Platinum (open-loop, no annual fee). If you don’t qualify, you’re then considered for, in order, the My Best Buy Credit Card (store card) and finally the My Best Buy Visa Gold (with annual fee).
In other words, you won’t have any control over which version you get approved for.
The rewards rates are reasonable, but redemption is tedious
Carrying any of these credit cards entails joining the My Best Buy consumer loyalty program, where rewards are earned in the form of points. The points are subsequently converted into Best Buy reward certificates: Every 250 points earned awards you a $5 reward card, making the points worth 2 cents each. (At least 250 points are required to redeem.)
The rewards options for buying at Best Buy are the same on both card versions. You will receive:
- Best Buy offers 5% back on all purchases (2.5 points each $1 spend).
- Options for flexible funding (more on that below).
However, the Visa version of the card goes far further. Aside from the 5% back at Best Buy, you’ll also get:
- Gas purchases get 3% back (1.5 points for $1 spent).
- 2% back on dining and grocery purchases (1 point for every $1 spent).
- Other daily purchases get 1% back (1 point for every $2 spent).
Again, every 250 points earned will result in a $5 reward card. Unless you manually modify this option, you’ll get a certificate in your mailbox every time you hit 250 points.
Brief tip: If you’re a My Best Buy Elite Plus member, you can improve your rate at Best Buy to 6% back (3 points each $1 spend). (There are three tiers in the program; Elite Plus is the highest, and you can get there by spending $3,500 in a calendar year.)
3. Consider deferred interest… However, there is a danger involved
The Best Buy cards sometimes promote “no interest if paid in full” deals (also known as “deferred interest“) with terms ranging from six to 36 months, which may seem appealing. However, it is critical to comprehend the concept of postponed interest.
Interest is not waived with this deal, as it would be with a real 0% intro APR offering. A deferred-interest offer, on the other hand, just defers the interest until later.
You’ll be alright if you pay off your purchase before the conclusion of the deferred-interest term. However, if you carry debt through the end of the month — even if it’s just a few dollars — you’ll be charged the card’s full continuing interest rate on your whole transaction, from the day you made it. And, as of July 2020, the interest rate on Best Buy credit cards is high: 25.24 percent.
If you need to finance a significant purchase and want to avoid paying interest, look into credit cards with actual 0% APR offers.
4. You’ll get a bonus for opening the card
Best Buy, like many other store credit cards, gives a one-time bonus to new customers.
When you are authorized for the card, a popular offer is to get a total of 10% back in Best Buy points on your first day of spending. That means you’ll receive 10,000 points if you spend $2,000 on your first Best Buy credit card transaction. This is the equivalent of $200 in Best Buy rewards vouchers. Unlike many credit cards, you will not be required to spend a certain amount on purchases with your new card before receiving the bonus.
Instead of the one-time 10% refund, you may choose flexible financing (aka, deferred interest offers).
5. You can do better if you aren’t a die-hard Best Buy customer
If you routinely spend enough money at Best Buy to earn your way into an elite membership level, a Best Buy credit card would make sense, particularly because you’d be shopping there often enough to cash in your points.
The My Best Buy Visa Gold, on the other hand, is not a fantastic value with its $59 annual charge. Even if you were an Elite Plus member, you’d have to spend roughly $1,000 at Best Buy to make up for the yearly charge. If you’re thinking about getting a Best Buy credit card, you should look at the My Best Buy Credit Card (store card) or the My Best Buy Visa Platinum.
However, once again, you have no influence over which card you will be authorized for.
A generic rewards credit card that is not connected to anyone merchant will be a better and more flexible alternative for the majority of consumers.
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Credit Cadabra gathered information on the My Best Buy Credit Card and My Best Buy Visa that was not vetted or disclosed by the card’s issuer.