Posted by: John S Kiernan

EDITOR’S RATING 4 / 5 PROS

• 10% back on your first Best Buy purchase
• 5% back on all other Best Buy purchases
• No annual fee in most cases

CONS

• Deferred interest promotional financing
• Confusing application process & APR structure
• 5% balance transfer fee

The Verdict:  Rewards or low rates? Best Buy’s credit cards are a microcosm for this fundamental question of credit card philosophy. There are two cards, a store credit card and a Visa. And while their shared application means you can’t decide which one to get (that ultimately depends on your creditworthiness), both give you the choice between earning 5% back on Best Buy purchases and potentially avoiding interest for six to 24 months with a promotional 0% financing offer.

We ultimately like this card best as a rewards-earning vehicle, given the added risk that accompanies Best Buy financing in the form of a feature known as deferred interest, which allows finance charges to retroactively apply to your entire original purchase amount if you miss a payment or have a balance when the promotional period ends. With no annual fee, the only real question in the rewards equation is how much you shop at Best Buy. You have to be a brand-loyal customer for this card to make sense, not only because you aren’t guaranteed the ability to use it anywhere else, but also in light of the fact that rewards are dispensed in the form of Best Buy gift certificates with expiration dates attached.

The Highlights

• 5% Back On Best Buy Purchases: You will earn 2.5 points for every $1 in Best Buy purchases charged to your card and receive a $5 reward certificate after accumulating 250 points. That’s the equivalent of 5% cash back, with a stipulation that proceeds can only be used for more Best Buy buying. The offer is even sweetened with an extra 5% back on your first purchase after account approval, as long as you make it within 14 days.Furthermore, it’s important to reiterate that neither the 5% regular earning rate nor the 10% first-purchase bonus (which applies to a purchase of any amount) is compatible with promotional financing offers. You pick one or the other: rewards or promotional financing.

• Up To 2% Back Elsewhere With The Best Buy Visa: If you get approved for the Best Buy Visa Credit Card, meaning you have at least good credit, you will be able to earn Best Buy rewards while buying items from other merchants. You’ll get a 1% base rate (1 point per $2 spent) that jumps to 2% (1 point per $1 spent) for purchases made at restaurants, bars, grocery stores and gas stations and at 3% (1.5 points per $1 spent) for purchases made at membership clubs (sports, recreation, athletic), golf courses, and sporting goods stores. 

• Likelihood Of No Annual Fee: Perhaps the most important feature of Best Buy’s credit cards, the lack of a fixed cost allows you to use Best Buy plastic to supplement an everyday rewards or 0% credit card without guilt. It also makes the Best Buy® Store Card a suitable choice for fruitful, cost-effective credit building.Unfortunately, not everyone who gets approved for a Best Buy® Credit Card card stands to benefit from this advertised account feature. If you don’t qualify for the Best Buy® Store Card, you might be offered a version of the Best Buy Gold Visa Credit Card that charges a $59 annual fee. Should that prove to be the case, we recommend asking for that account to be closed. The benefits of being an accountholder won’t warrant the cost.

The Lowlights

• Special Financing Offers: There are currently four financing offers from which Best Buy cardholders may choose, assuming they wish to eschew rewards: 1) 0% for six months on purchases of at least $199; 2) 0% for 12 months on purchases of least $399; 3) 0% for 18 months on major appliance purchases of at least $599 and 4) 0% for 24 months on home-theater purchases of at least $799.Such offers could help you save money on big-ticket purchases, if you’re very careful. But they also have perhaps more potential to be a trap that cardholders don’t see coming. The deferred interest clause in these financing arrangements means the slightest slip up could leave you buried in the very interest charges you were seeking to avoid. This is not a game that we recommend playing, especially if you can get approved for a non-retailer-branded 0% credit card, which would not use deferred interest.

  Furthermore, Best Buy’s special financing offers apply to items purchased during a single trip to the store. In other words, the 0% introductory rate that you could get for six months on a $300 purchase would not apply to a subsequent Best Buy purchase made with the card within that six-month window. The second purchase would accrue interest based on the card’s regular APR, unless another applicable financing offer is available. 

• 5% Balance Transfer Fee: The Best Buy Visa Credit Card is structured to encourage new purchases more so than to help the retailer’s customers save money. One example of this is a 5% balance transfer fee that serves as a disincentive to using the card to pay off an existing balance incurred with a different credit card. When you further consider that you’d be paying that fee not for a low introductory interest rate but instead for the card’s 27.49% (V) regular APR, it’s clear this is not the ticket to debt freedom. 

• High Regular APR: Based on their terms and conditions, both the Best Buy Gold Visa Credit Card and the Best Buy® Store Card have a 27.49% (V) regular APR. That’s well above the market average for credit cards for people with good credit (20.79%) and fair credit (22.99%), which are the respective approval requirements for the two cards. It’s also higher than the average store credit card’s 25.76% APR. This merely underscores that Best Buy credit cards are ill-suited to financing. 

• Confusing APR Structure: Not only are you likely to incur interest charges at an above-average rate if you carry a balance from month to month with a Best Buy® Credit Card, but Best Buy also adds a cloud of confusion to the process by sending mixed messages about what that rate will ultimately be. While the terms state a 27.49% (V) APR, there’s a footnote indicating that’s just a 90-day average. If this rate changes in accordance with the Prime Rate, the terms say you will be provided with information about the rates used in the previous 30 days. That doesn’t seem too helpful, and it certainly doesn’t provide much clarity regarding the ultimate cost of revolving debt.To make matters worse, Best Buy’s online credit card application includes a note at the bottom of the page that draws a distinction between variable and non-variable rates, and references other card offers without providing any necessary context. It reads, “As of the last 30 days, My Best Buy, Magnolia & Pacific Sales Credit Card Purchase APRs: variable 23.74%–28.49%, non-variable 9.00%–24.34%; My Best Buy Visa Purchase APRs: variable 12.49%–28.49%, non-variable 9.99%–20.24%.”

  This is one of the most confusing interest rate disclosures we’ve seen. We advise against putting yourself in the position to learn what the real rate is through experience. 

• Confusing Approval Process: Not only are there two main types of Best Buy credit cards – store cards and Visa cards – but each of those categories has two iterations as well. There’s a standard store card and a preferred store card as well as a Visa Platinum card and a Visa Gold card. You’ll first be considered for the Visa Platinum version, and if you don’t qualify, you’ll then be evaluated for the preferred store card, the standard store card and the Visa Gold card, in that order. It might seem a bit weird that a Visa is the last option, considering that you can use it more places than the store card, but its anchor position is largely due to the presence of a $59 annual fee.

Other Things To Consider

• My Best Buy Elite Plus Members Get Added Perks: You can achieve My Best Buy Elite Plus status by spending at least $3,500 on your card in a calendar year at Best Buy and bestbuy.com. The purchases that you make after achieving this status will yield an extra 0.5 point per $1, which is the equivalent of 1% back in Best Buy’s rewards program. Elite Plus status also scores you an extra 15 days in which to return or exchange items, plus free expedited shipping. Such benefits should certainly be taken into account by high-spending, brand-loyal Best Buy customers. 

• Rewards Dispensed As Best Buy Gift Certificates: Best Buy credit card rewards are bestowed in the form of points, redeemable for Best Buy gift certificates at a rate of $5 per 250 points. This is important to keep in mind, not only in the sense that redemption is ultimately restricted to Best Buy’s wares, but also because it makes Best Buy points susceptible to devaluation and expiration. After 12 months of account inactivity, you will receive $5 certificates for every 250 points you’ve earned, with any leftover amount being lost. What’s more, the certificates themselves expire (the use-by date is listed on each one), and you might have to show ID if redeeming in a store. 

• Free Shipping: Best Buy® Credit Card users automatically receive free shipping on BestBuy.com purchases of at least $35. If you already make a lot of Best Buy purchases online, this alone could be reason enough to apply for the card.

Compared To The Competition

	Best Buy® Credit Card	Walmart® Credit Card	Amazon.com Credit Card	Target Credit Card
Annual Fee	$0	$0	$0	$0
Rewards Bonus	10% back in rewards	$25 discount	$50	N/A
Rewards Rate	0.5 - 2.5 points / $1	1 - 3% Cash Back	1 - 3 points / $1	5% Cash Back
Purchase Intro APR	0% - 11.9% for 6 - 48 months	Not Offered	Not Offered	Not Offered
Transfer Intro APR	Not Offered	Not Offered	Not Offered	Not Offered
Regular APR	27.49% (V)	18.9% - 24.9% (V)	16.49% - 24.49% (V)	25.15% (V)
Editors’ Rating	4.0 / 5	2.5 / 5	4.5 / 5	5.0 / 5
Details, Rates & Fees	Learn More	Learn More	Learn More	Learn More
Winners	Walmart® Credit Card		Amazon.com Credit Card

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