Best Buy Credit Card Credit Score Review 2021 Update
What do you do if you’re just starting out or have a bad credit score? There are a few ways you can work on getting your credit established or back on track. One way to do that is by applying for a store credit card like the one offered by Best Buy.
Is your future a hypothecary or car loan? If so, you should learn a few things before you try to make the dream a reality. It is a major financial responsibility to purchase a home or a car, one that takes a lot of time, effort, and energy.
Also, most of us don’t have enough cash to put down for the full purchase, which means having to turn to a bank for a loan to finance the purchase. In order to qualify, you’ll need good credit.
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Understanding Your Credit Score
Your FICO score helps lenders decide whether they’ll extend your credit. FICO stands for the Fair Isaac Corporation. This score is a three-digit number that is derived from your credit reports from the three major credit reporting agencies—Equifax, Experian, and Trans Union.
The FICO score calculated using five different factors, each with its own weighting based on importance:
- Payment history: 35%
- Balances owed: 30%
- Length of credit history: 15%
- New Credit: 10%
- Credit Mix: 10%
Essentially, more than two-thirds of the overall credit score is based on how well you pay off your balances in full and on time.
The remainder of the credit score looks at information such as the length of your credit history and the frequency with which you open new lines of credit.
Keep in mind—a FICO score is a credit score, but not all credit scores are FICO scores.
The way they’re calculated, how they’re used, and by whom are all differences between the two. Roughly 90% of lenders use FICO scores to make their credit decisions.
Store Credit Cards
You’re probably aware that almost every retail store—big or small— has a credit card. After all, almost every cashier you’ll come across will ask you whether you’d like to apply for their card.
Most of these credit cards are financed through different banks or financial companies.
Also, some of the most notable are those available through Target, Amazon, Walmart, Costco, the Gap family—Gap, Banana Republic, and Old Navy—and Best Buy.
Getting approved for a card from many retailers can be fairly easy—especially since the application can be done online or right at the cash register. That’s because these lenders have looser restrictions than traditional credit card companies.
The majority of store credit cards come with no annual fees and often come with a very manageable credit limit so, hopefully, you won’t be overspending.
If you’re a frequent shopper at that retailer—say at Best Buy—you can even earn points or other rewards. Best Buy also offers two different credit card options—the My Best Buy Credit Card and the Best Buy Visa.
The Best Buy Credit Card can only be used at Best Buy. You can earn 5% back in rewards and another 1% if you’re an elite cardholder. You also get flexible financing options if you’re making larger purchases and have a credit limit that fits.
The Visa card, on the other hand, can also be used anywhere Visa is accepted. Not only do you get the same perks as the in-store credit card, but you also get 3% back in rewards on gas purchases, 2% on dining, and 1% back on other purchases. Rewards can be used toward future Best Buy purchases.
But like any other store card, there is a catch. Expect to pay higher-than-average interest on the card. The annual percentage rate (APR) for both cards is 26.74% on regular purchases and both charge $40 for late payments.
Best Buy Credit Card Fees
The store card carries a high APR, for purchases that are eligible for the 48-month reduced rate plan. This card has no fees except for a late payment fee and returned payment fee, each $39. It can only be used for when shopping in Best Buy.
Best Buy Credit Card Preferred & Best Buy Credit Card Compared
|Fees||My Best Buy Credit Card||My Best Buy Visa® Credit Card|
|Annual Fee||$0||$0-$59 (depending on creditworthiness)|
|Where can you use?||In-store purchases only||Anywhere|
|Annual Percentage Rate (APR) for Purchases||26.74% This APR will vary with the market based on the Prime Rate. 11.90% for select purchases eligible for the 48 month reduced rate credit plan (The store sales associate or store website will identify which purchases are eligible for the reduced rate credit plan)||26.74% This APR will vary with the market based on the Prime Rate. 11.90% for select purchases eligible for the 48 month reduced rate credit plan (The store sales associate or store website will identify which purchases are eligible for the reduced rate credit plan)|
|How to Avoid Paying Interest on Purchases||Your due date is at least 25 days after the close of each billing cycle.||Your due date is at least 25 days after the close of each billing cycle.|
|Minimum Interest Charge||If you are charged interest, the charge will be no less than $2.||If you are charged interest, the charge will be no less than $2.|
|Late Payment Fee||Up to $38||Up to $38|
|Returned Payment Fee||Up to $38||Up to $38|
The card’s interest rate is high for purchases and balance transfers. Purchases that are eligible for the 48-month reduced rate plan charge a lower APR.
Based on your credit score, there will either be an annual fee of $59 or no annual fee. Both cards include higher terms than you’ll find with other rewards credit cards, especially if you happen to qualify for the one with the $59 annual fee.
If this is the case, there are many others available with no annual fee at all and more benefits. In fact, the U.S. Bank Cash+ Visa Signature offers similar rewards with no annual fee.
Further, the Blue Cash Preferred Card from American Express provides more benefits with more spending and redeeming flexibility than either of the Best Buy cards, with an annual fee of $95.
Interest Rates on Credit Cards is High
Both Best Buy cards carry high APRs which can quickly add up if you aren’t diligent in paying your balance in full each month.
Additionally, if you typically carry a balance, it’s best to choose a card with a lower interest rate. Great options include:
- Citi Simplicity
- Blue Cash Preferred Card from American Express
- U.S. Bank Cash+ Visa Signature
However, if you can pay your entire balance in full each month and avoid paying interest, the high APR is less of an issue.
Saving on Interest with Special Financing
The Best Buy special financing offers are dependent on how much you spend at Best Buy. Although you can avoid paying interest for as long as 24 months, this is only if you spend more than $799.
If you plan on making a smaller purchase or purchasing with different retailers, you may be better off with a card that offers a 0% introductory APR.
It is nearly as long as Best Buy’s longest financing offer. Additionally, you don’t have to spend a certain amount to take advantage of it.
Credit Score Needed for Best Buy Cards
Store cards are generally easier to qualify for if you have had minor credit score problems in the past. Your credit score rating is considered bad if it is in the lower 600s. You may have a better chance of approval for the Best Buy cards than you would with other cards.
Be prepared, however, to receive a relatively low initial credit line — around $500 or less. With a low credit limit, you may not be able to charge an electronic purchase to the My Best Buy cards.
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