10% Off for A 7 Year Headache

As a sophomore in college I was invited to staff a conference in North Carolina with a few friends.  Admittedly, part of the reason I accepted the invitation was because a stunningly beautiful girl named Beth was going to be on the trip.  This meant that I needed to look good for several days in a row at the conference.  My wardrobe of college tee-shirts and hoodies was not going to cut it. 

A couple of weeks before the trip I went to an open-air mall in South Florida to do a little shopping.  At one store I snatched up a jacket, a pair of pants, and a sweater.  The total price tag was more than a $100.  This was more than I was prepared to spend.  I started to hang the items back on the rack when I noticed a sign above the register that read:

“Sign Up for Our Store Credit Card Today and Receive A Discount on Your Purchase.”

Perfect!  Problem solved!  If I signed up for the credit card I should have just enough cash to make the purchase.  So I filled out the credit card form and surprisingly I was instantly approved.  That is when the manager told me that I could put my total purchase on the new card that day and still receive 10% off. 

“What’s not to like,” I reasoned.  More cash in my pocket meant more cash on the trip.  I could just pay off the card when I returned from the conference and get 10% off!  I charged the clothes, got the discount, and proudly exited the store with my new threads.  That was in 2004.

Several months went by and I never received a bill from the credit card company.   I forgot about making the purchase.  Then I received a call one day letting me know that I had some out-standing debt with a credit card company.  Apparently, I had put down my parents address instead of my own.  When they received notifications in the mail, I’m sure they saw it as junk mail from the clothing company and dismissed them.  As soon as I learned about the delinquency, I paid off the debt, paid the late fees, and cancelled the card.

Fast-forward four years to 2008.  The stunningly beautiful girl I went to the conference with was now my stunningly beautiful wife.  I had just accepted my first job and we were on the verge of buying a house.  That is when I learned from our loan officer that there were some blemishes on my credit.  The greatest issue… my retail store credit card.  Fortunately, we were able to prove through some other means that we were credible people to loan to and were able to buy the house.

It is now 2011.  This year, the negative blot on my credit report caused by my mismanagement of the retail credit card will finally roll off my credit report… 7 years after the incident.  The issue came up when buying a house, getting insured, buying a used car, and has negatively impacted my credit score for years.  All of that to save 10% on a clothing purchase in 2004. 

As we approach the holiday season, signs will abound in retail stores boasting a percentage off your purchase for filling out a credit card application.  Credit cards offers will become enticing when you consider the potential to “buy now, pay later”.  Before you sign your name to those kinds of applications that make such nice sounding promises, make sure you count the cost.  Late fees are expensive.  Spur of the moment credit card applications are easy to forget (especially if you fill out a number of them in the same time span).  Negative credit information stays with you for at least 7 years.  Is 10% off really worth the risk?