Are you tired of paying a 29.9% interest rate on your HBC MasterCard or store credit card? You should be, it’s an exhorbitant amount of interest. The good news is, there are plenty of alternatives. We’ve found several solutions, that will allow you to cut your interest rate down to 0% for 12 months, hopefully giving you the time you need to pay down your credit card balance interest free.
If you have an HBC MasterCard, and millions of Canadians do, and maintain a balance, you’re paying close to 30% in interest per year. If you bought something for $500, you’ll owe $144 in interest alone for the year! That’s why we’re firm believers in transferring your balance from your store credit card or MasterCard to a low interest balance transfer card or line of credit.
The process is simple and the savings are huge. You apply for the balance transfer credit card. On the application itself, you enter the HBC MasterCard and any additional credit card numbers with the balance you want paid off for each card. The credit card company takes care of the rest. Now you’ll owe that money at 0% for 12 months to the new bank.
The goal of a balance transfer is to take advantage of the low interest promotional period to pay down your debt, or to reduce your interest expense. Either way you win. Just remember, at the end of the promotional period your interest rate will increase. At that point hopefully you’ve taken the time to pay down your balance. If you haven’t, the go to rate will still be lower than 29.9%. However, you can also decide to transfer the balance once again to a low promotional rate or to a low interest credit card or line of credit.
HBC MasterCard is Not Alone
We don’t mean to pick on HBC MasterCard. Frankly, there’s a long list of high interest charging store credit cards in Canada, including:
Ikea store credit card: 29.99%
HBC MasterCard: 29.9%
HBC store credit card: 29.9%
Sears store credit card: 29.9%
The Brick store card: 29.9%
Home Depot store card: 28.8%
Home Hardware card: 28.8%
Low Interest Rate Alternatives
If you’re tired of paying sky high rates on your store cards and you need an interest holiday, try one of these Canadian balance transfer offers. We’ve researched the market, and these are some of the lowest and best offers out there:
Balance Transfer Credit Card
|Promotional Rate||Promotional Rate Period||Balance Transfer Fee||Annual Fee||
Representative Interest Savings on $750 Transferred
|#1||MBNA Platinum Plus Mastercard||
|#2||Best Western Rewards MasterCard||
|#3||Scotia Value Visa Card||
Many of the store credit cards, including the HBC MasterCard, will either offer a discount or some form of promotional financing if you apply for their credit card. Just remember, store cards are notorious for setting-up land mines you should be wary of. More often than not, just like with a Casino, the house always wins:
1. Payment in Full: While you may not owe interest or payments for the first 12 months, if you fail to pay off the loan in FULL at the end of the 12 months, you will retroactively owe interest on the entire purchase amount from the date of the purchase! So if you took out a $1,000 no interest, no pay loan, and then either paid one day late or 95% of the balance on the due date, you will owe approximately $300 in interest!
2. Late Payments: If you miss a payment by a day, you’re not just paying additional interest for the one day you were late. You will lose the benefit of the grace period and pay the 29.9% APR for the entire length of the month.
3. Grace Period: While you may think you’re doing yourself a favor by paying the minimum payment, by not paying off your balance in full, you also lose the benefit of the grace period. You’ll be charged full interest from the day the purchase was first made – even if you pay the minimum payment on time.
4. Balance Insurance/Protection: Don’t get it. It’s so expensive, it becomes an effective interest charge of over 40%!!! That’s why the U.S. has all but outlawed the product. Rarely is it ever used, and its cost is significantly more than its benefit.
All that said, if you find yourself with a balance on a store credit card, pay it off as soon as you can. If you can’t do it with cash, pay it off with a low interest balance transfer card or line of credit. But whatever you do, don’t do nothing.