The Best Buy Credit Card doesn’t offer any additional rewards on top of the Reward Zone loyalty program, but it does allow you to defer payment on big-ticket items. If you’re approved, and if your purchases total $429 or more, you can avoid paying interest as long as you pay in full by 18 months. However, it’s not that great of a deal: 18 months is an okay no-interest time frame, but if you don’t stick to the schedule, you’ll be hit with retroactive interest. You can probably find better 0% intro APR cards that give out rewards in addition to deferring interest payments.
The Best Buy Credit Card’s uses and pitfalls
The Best Buy card serves a useful purpose: it allows you to make a purchase and avoid paying interest as long as you make every single monthly payment. However, the interest rate, should you not pay off your debt in time, is uncomfortably high: 25.24%-27.99%. This is the rate you’d pay if you made all of the payments on time, but still didn’t pay off your purchase in 18 months. The card comes with a penalty APR of 29.99%, which would apply for six months if you make a late payment.
The danger with the card is that if you don’t pay off your debt in 18 months, you need to pay interest on the entire bill, not just what you have left. For example, if you’ve paid off $2,500 of a $3,000 purchase and have the minimum 25.24% interest rate, you’ll need to pay $757 in interest. Furthermore, if you miss a payment, your interest-free period will end even if 18 months haven’t yet passed.
Alternatives with better rewards and more leeway
Instead of the Best Buy credit card, we recommend a 0% intro APR credit card. These cards come with periods from 6-18 months where no interest is charged on your purchases or balance transfers. If you miss a payment, a penalty APR will kick in (just like the Best Buy card) but if you make your payments and still owe money after the promotion ends, you’ll only owe interest on what you’ve yet to pay.
If you should find yourself at month 17 with a lot of debt left, consider a balance transfer credit card that will let you pay no interest on your debt for a promotional period. While there’s usually a 5% balance transfer fee, it’s better to pay the upfront cost than be stuck with Best Buy’s retroactive, high interest rates. Alternatively, skip Best Buy altogether and just find a card with 0% purchase APR.
The best 0% purchase and balance transfer APR cards are the Citi Diamond Preferred and the Citi Platinum Select. Both of the cards offer 18 months interest-free. The ongoing APR is far more reasonable: 11.99%-20.99%. The minimum APR is less than half of Best Buy’s. You also don’t need excellent credit to qualify.
The American Express Blue Cash Preferred, although it is a rewards credit card, has 0% interest on purchases for 6-12 months. It gives 6% cash back on groceries, 3% on gas and department stores, and 1% elsewhere. While it has a $75 annual fee, you’d only need to spend $105 on groceries each month to break even.
Finally, if you have a ton of debt that will take more than two years to pay off, consider a Pentagon Federal credit card. Every card has a 4.99% interest rate for the lifetime of transferred debt, as well as no balance transfer fee.