No interest LEGO credit card?

[mania3]

The other day I was shopping at the mall in Ontario, CA where they have a LEGO Store. After making my purchases my girlfriend had to make a quick stop at a store. She swiped the store's credit card for the purchases and I asked how the interest rate was on the card. She informed me that it has none and she simply needs to make the minimum monthly payment. This benefit is universal for the card, provided you obey the terms of service, and I thought that was pretty neat. So while it might not be likely, would you want one if TLC offered it? Say it were good for S@H, LEGO Stores, and LEGOLAND. I for one would love it and would sign up for it in a heartbeat, though I think I would be making some sort of payment on it until the day I die. Given the current U.S. credit crisis this topic might be sour grapes for some, but I thought I'd ask nonetheless.

[Brickthing]

TLG wouldn't trust people like us with a zero-interest credit card for LEGO.

The problem with those "zero-interest" credit cards is that should you ever be unable to pay the minimum, you'll start getting an interest rate that's much much higher than normal credit cards, to compensate for the initial interest-less period.

[mania3]

The problem with those "zero-interest" credit cards is that should you ever be unable to pay the minimum, you'll start getting an interest rate that's much much higher than normal credit cards, to compensate for the initial interest-less period.

Well, as I understand, my girlfriend avoids getting in a position of being unable to make the minimum payment. And on her card it is always interest free. It's a perk of the store's card and it's certainly a store girls could overdo it in, so they trust their loyal customers. Maybe LEGO could do the same.

[xenologer]

Well if you dont let yourself get into a position of being unable to pay, ie you have the money before you spend it anyway.

Then whats the point of having the card?

Less cards the better is how I see them.

[Brickmaster]

Credit cards as a whole seem to be an entirely bad situation to get into.

[CP5670]

I use credit cards as a matter of convenience. I don't actually take out loans off them.

[eti]

I never paid any interest on my Mastercard because I set it to pay the bills monthly. I only use it for situations where regular bank transfers are impossible (i.e. for buying stuff outside the EU on the internet)

[Big Pete]

This must be some kind of special promotion on the card because most credit cards don't work like that.

The only way to avoid interest is to pay the whole balance off each month, by the deadline.

If you just pay the minimum, then you avoid any penalties for not making payments, but you pay interest on the rest of the balance! Think about it, what would be the point of a credit card, if you just had to pay the minimum off each month. That's a free loan and no benefit to the company providing the credit. There will be some interest charged at some point. I reckon you need to check the deal on this card ;)

Getting into credit card debt in these times of credit crunch is a bad bad bad idea!

[mania3]

If you just pay the minimum, then you avoid any penalties for not making payments, but you pay interest on the rest of the balance! Think about it, what would be the point of a credit card, if you just had to pay the minimum off each month. That's a free loan and no benefit to the company providing the credit. There will be some interest charged at some point. I reckon you need to check the deal on this card ;)

No, it's really how it works. No interest, ever. You just make payments on what you buy, that's it. If you want to look into it, it's the Victoria's Secret store credit card. It doesn't charge interest. I see everyone's mentality on credit cards though. But, I never pay on a credit card either because I avoid it like the plague. But when I make big purchases on a computer or something like that I take advantage of 0% interest purchase plans and use that 6 month or 1 year period to gradually pay something off without having to pay interest. What I'm saying would be neat about a credit card like this is being able to buy off big sets for which you wouldn't normally have cash all at once. Two I can think of are the $499.99 Millennium Falcon and the new $399.99 Death Star.

[Deepwoods]

There are some advantages to using credit cards... if you get the right one & use it correctly.

Most cards like visa & amex have a 2% cash refund reward on every purchase, that's a bit of a little bonus. Also so long as you pay off the balance monthly you can keep the cash you would have otherwise spent in a high interest savings accn't at 4-5% for the month.

You are paying the 2.3% price bump on all retail purchases that accept credit cards anyway so you might as well take advantage of it. (thou some stores will reimburse you their credit fees if you pay in cash... not many thou)

also you don't have to carry cash in your wallet.

Some banks also give you an additional 1% usage bonus when you transfer funds to pay a credit card balance using their on-line banking facility... so in the long run you make 3% or more back on every purchase + the few cents in savings interest (better if your credit card uses a "don't pay for 6 months on purchases over $200 like the BORG - Big Orange Retail Giant also known as Home Depot)...

just don't get too far ahead of yourself.

[mania3]

just don't get too far ahead of yourself.

Exactly. But I wasn't bringing this up so people could discuss how to manage your finances. I was assuming that people would know the proper usage of a credit card and see the advantages of one such as this. And to those who wonder what the advantage of such a card to TLC would be, just look at the main reasons a store would do it. Stores don't issue credit cards in hopes of making money on the interest, that is usually yielded to the credit card company, not the store. The advantage of an exclusive no interest credit card is that they get to push merchandise. When they put big sets on sale and want to clear out inventory people will be enabled to buy and pay over time, instead of being forced to come up with $400-500 all at once.

[Ricecracker]

I just don't think that this would be a good idea for LEGO. First of all, a large proportion of their clientel is children, who wouldn't know what to do with it. Secondly, I think that LEGO should be worried of non-paying buyers, that's why they would want the money up front. Also, I was going to suggest that a debit card might work, but thats why they have gift cards! I don't see this as a feasible option for LEGO.

-Ricecracker

[The Rancor]

At the moment, I don't really/often use the credit card because I like to spend what I have in my bank through debit.

That's usually fine for me

Edited January 26, 2009 by The Rancor

[Eilif]

No corporation is entirely "innocent", but TLG has always tried to whatever they can to avoid being seen as sleezy. I think that a LEGO credit card would tarnish that image. I personally would not use it. I have a credit card that I keep for "emergencies" but I haven't had to use it in about 2 years. I also don't carry cash, that's what a Debit card is for.

As for this VSecret card, if it is a payment, and not interest (IMHO, it sounds like someone hasn't read their statement close enough), then it's not as toxic as other credit cards, but you are still accruing a balance and your monthly payment will continue to increase as your balance increases. Better to pay it once and not have a balance that will continue to grow.

LEGO already has a much better deal going with the Loyalty card, which over the course a full card gives you aproximately 15% back.

[mania3]

LEGO already has a much better deal going with the Loyalty card, which over the course a full card gives you aproximately 15% back.

No, not if you're referring to the spend $200, get $10, spend $200, get $20 card. That would come out to 7.5% cash back and is only good for people near LEGO stores.

[natelite]

No corporation is entirely "innocent", but TLG has always tried to whatever they can to avoid being seen as sleezy. I think that a LEGO credit card would tarnish that image. I personally would not use it. I have a credit card that I keep for "emergencies" but I haven't had to use it in about 2 years. I also don't carry cash, that's what a Debit card is for.

As for this VSecret card, if it is a payment, and not interest (IMHO, it sounds like someone hasn't read their statement close enough), then it's not as toxic as other credit cards, but you are still accruing a balance and your monthly payment will continue to increase as your balance increases. Better to pay it once and not have a balance that will continue to grow.

LEGO already has a much better deal going with the Loyalty card, which over the course a full card gives you aproximately 15% back.

credit card is not sleezy. every large departmental stores do this. the problem though is that TLG will need to form a finance co in order to lend to customers.

imo, this isn't the right mix for TLG since it will mean they are branching to become a financial co. if you can't do it well, don't do it at all.

[Eilif]

No, not if you're referring to the spend $200, get $10, spend $200, get $20 card. That would come out to 7.5% cash back and is only good for people near LEGO stores.

Yup, you're right, my bad on the math. I still say that 7.5% is great. However, it would be great if they made the warranty card electronic so that folks could get their "stamps" even when ordering from LEGO online.

credit card is not sleezy. every large departmental stores do this. the problem though is that TLG will need to form a finance co in order to lend to customers.

imo, this isn't the right mix for TLG since it will mean they are branching to become a financial co. if you can't do it well, don't do it at all.

I still say it's sleezy, I'm sick of being offered a credit card everytime I'm in a department store, or any of the other stores that constantly try to make a bit of extra cash of their customers with a credit card.

You're right about becoming financial company. Most retailers outsource their credit cards, and despite some of the flextronics issues TLG is not a company that likes to outsource important functions. You're also right that LEGO is not about to enter a new business when their stated model for recovery from near bankrupcy and ensuring future success is to focus on their "core strengths".

[Big Pete]

No, it's really how it works. No interest, ever. You just make payments on what you buy, that's it. If you want to look into it, it's the Victoria's Secret store credit card. It doesn't charge interest.

sorry to harp on about this, but I still believe you're wrong.

Is it this card?

If so, if you read the T&Cs you'll see the APR is 22.8%. That is interest. If you don't pay off the full amount every month, you will incur interest. It is a "Credit" card afterall ... the only time credit cards don't charge interest is if you've got some sort of short term 0% deal or interest free balance transfer. It won't last forever. I really suggest you check your paperwork.

Edited January 29, 2009 by Big Pete