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Best Buy Credit Card: Is It Right for You?

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Electronics superstore Best Buy accepts Visa, MasterCard, Discover and American Express credit cards, in addition to its own store credit cards. It offers two Best Buy-branded cards that give you bonus rewards for shopping at Best Buy.

In the Nerds’ analysis, carrying a Best Buy credit card might make sense if you are a frequent electronics buyer and do the bulk of your electronics shopping at Best Buy. That’s because the rewards you earn on these credit cards are redeemable only at Best Buy. The cards also give you the option of deferred-interest financing for certain purchases, but if avoiding interest is your primary aim, a 0% APR offer on a bank card would be a safer bet.

What Best Buy credit cards are available?

Best Buy offers two kinds of credit cards:

  • The My Best Buy Credit Card. This is a store card accepted at Best Buy and BestBuy.com. There is no annual fee. (Best Buy says some applicants for this card might get a version called the “My Best Buy Credit Card Preferred,” but the stated terms of the cards — rewards, fees, interest rates — are identical.)
  • The My Best Buy Visa. This is accepted anywhere that takes Visa. This card comes in two versions, with the only significant difference being the annual fee. When you submit your application, Best Buy will tell you which one you’ve been approved for:
    • Gold. This version has an annual fee of $59.  
    • Platinum. This version has no annual fee. 

According to Best Buy, when you apply for a card, you are first considered for the My Best Buy Visa Platinum. If you don’t qualify, you’re then considered for, in order, the My Best Buy Credit Card Preferred, the regular My Best Buy Credit Card and finally the My Best Buy Visa Gold.

Carrying any of these cards means joining the My Best Buy frequent shopper program. Rewards are earned as points in that program. The program has three levels: basic, Elite and Elite Plus. The basic level is free for anyone to join. You reach Elite level when you spend $1,500 in one calendar year at Best Buy. You reach Elite Plus level by spending $3,500 in a calendar year.

The standard rewards program is the same on each card. You have a choice between:

  • 5% back on all purchases at Best Buy (6% for Elite Plus).
  • Deferred-interest financing for major purchases.

The financing offers vary with the calendar. For the 2016 holiday season, for example, Best Buy was offering six months of deferred interest for purchases of $199 and up; 18 months on purchases of $479 and up; and 24 months on home theater purchases of $799 and up.

However, it’s important to understand what “deferred interest” means. When a card offers deferred interest, it’s not waiving the interest. Rather, it’s setting it aside until later. If you pay off your purchase by the end of the deferred-interest period, you’re fine. But if you carry a balance past the end of the period, you’ll be charged interest on your entire purchase, going back to the day you made it. And the interest rate is high: 25.49% as of November 2016. Read more about the dangers of deferred interest.

The My Best Buy Visa offers additional rewards for spending outside of Best Buy. During the 2016 holidays, it offered:

  • 2% back at restaurants, grocery stores and retail stores (except Target, Wal-Mart, Sam’s Club, Costco and Amazon).
  • 1% back on all other purchases.

Should you get a Best Buy credit card?

If you shop at Best Buy only occasionally, a Best Buy credit card isn’t a good fit, since your rewards are redeemable only at the store. If you’re regularly spending enough to earn your way into the Elite or Elite Plus levels, though, the rewards rate on a Best Buy credit card beats anything you could get from a bank card, and you’d be shopping at the store enough that you could regularly cash in your rewards.

That said, with its $59 annual fee, the My Best Buy Visa Gold is not a good deal. Even if you were an Elite Plus member, you would have to spend nearly $1,000 at Best Buy before your rewards would make up for the annual fee. If you’re considering a Best Buy credit card, you’ll want either the My Best Buy Credit Card (regular or preferred) or the My Best Buy Visa Platinum.

If you choose to get a Best Buy credit card, do not carry a balance from month to month. The high APR will eat up your rewards. And if you make use of the deferred-interest financing, commit yourself to paying off the balance well before the end of the deferred-interest period, or you could end up staring at a huge interest charge.

Alternatives to a Best Buy credit card

All of these cards charge no annual fee.

IF YOU WANT CASH BACK

The Discover it® - Cashback Match™ gives you 5% cash back in rotating categories on up to $1,500 in spending per quarter, after you activate the category online. All other spending earns 1% cash back. Bonus categories have historically included such merchants as department stores and Amazon, whose offerings often intersect with Best Buy’s. In addition, Discover’s excellent bonus mall, Discover Deals, frequently offers sizable discounts on Best Buy purchases. The Discover it® - Cashback Match™ gives you a nice 0% APR (not deferred-interest) period: 0% on Purchases and Balance Transfers for 14 months, and then the ongoing APR of 11.99% - 23.99% Variable APR. It also has a promotional bonus: You could turn $150 into $300 with Cashback Match™. Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically. Finally, it’s worth noting that cash back from Discover is just that — cash back. Use it however you want.

The Citi® Double Cash Card – 18 month BT offer gives you 1% cash back on every purchase, plus another 1% back when you pay for them. It’s not as high of a rewards rate as the Best Buy credit cards offer for Best Buy purchases, but you can use the cash back on anything you like. Reward redemption options include a statement credit or check ($25 minimum). The annual fee is $0. Though many top rewards credit cards require you to have excellent credit, you can qualify for the Citi®Double Cash Card – 18 month BT offer with only good credit.

IF YOU WANT A LONG 0% INTEREST PERIOD

The Citi Simplicity® Card - No Late Fees Ever has one of the longest introductory 0% APR periods on the market: 0% on Purchases and Balance Transfers for 21 months, and then the ongoing APR of 14.99% - 24.99% Variable APR. If you’re looking to finance a large Best Buy purchase, this card will give you nearly two years’ worth of breathing room to pay it off before interest kicks in. (And even then, you’d owe interest only on the unpaid balance going forward, rather than having all that deferred interest suddenly pile onto your bill.) If you’re forgetful, the card doesn’t charge late fees or penalty APRs (but try not to forget).

IF YOU WANT BOTH

The Chase Freedom Unlimited® offers both rewards and a good, long 0% APR period, plus a hefty sign-up bonus. The rewards: a flat 1.5% cash back on every purchase. The introductory APR: 0% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 15.99% - 24.74% Variable APR. The sign-up promotion: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. Say you have your eye on a $600 TV at Best Buy. If you paid for it with a new Chase Freedom Unlimited®, you’d earn cash-back rewards of $9, plus your $150 bonus, and you’d get more than a year to pay it off without interest.

» MORE: NerdWallet’s best store credit cards

Information related to the My Best Buy Credit Card and the My Best Buy Visa has been collected by NerdWallet and has not been reviewed or provided by the issuer of these cards.

Paul Soucy is an editor at NerdWallet, a personal finance website. Email: paul@nerdwallet.com. Twitter: @paulsoucy.