What Is Best Buy’s Interest Rate?

When it comes to financing your latest tech purchase, understanding the interest rate attached to your credit card is crucial. One of the most popular store credit cards is the Best Buy credit card, known for its rewarding points system and various financing options. But what exactly is Best Buy’s interest rate?

Understanding Best Buy’s Interest Rate

Best Buy’s interest rate varies depending on the type of credit card and the specific transaction. For the My Best Buy®, Magnolia™, and Pacific Sales™ Credit Card Purchase, the APRs are variable, ranging from 29.49% to 31.49%, and non-variable, ranging from 9.00% to 24.34%. The standard interest rate for purchases on all Best Buy credit cards is 31.49% (V). For balance transfers, the interest rate is also 31.49% (V), while the cash advance rate is 29.99% (V).

Keep in mind, these rates are subject to change and it’s essential to check the latest information before making any financial decisions.

How Best Buy’s Interest Rate Compares

Compared to other retail credit cards, Best Buy’s interest rate is quite high. The average annual percentage rate (APR) for retail store cards is 26.72%, and for general-purpose credit cards, it’s 22.66%. Some retail store cards even offer minimum APRs as low as 13.99%. Therefore, Best Buy’s interest rate is significantly higher than the average rates for both retail and general-purpose credit cards.

The Introductory Interest Rate Promotions

Best Buy does offer introductory interest rate promotions for new cardholders. For instance, when you are approved for the My Best Buy® Credit Card, you can get 10% back in rewards on your first day of purchases. The card also has an introductory APR of 0% for 12-24 months on certain purchases.

However, this is a deferred-interest offer, not a true 0% intro APR promotion. If you don’t pay off the entire balance before the promotional rate expires, the regular APR will apply retroactively from the purchase date, which can be quite costly.

Calculating Best Buy’s Interest Rate

To calculate the interest on your Best Buy Credit Card, you need to determine the average daily balance during the billing period and the daily interest rate. This involves converting the APR to a daily rate, calculating the average daily balance, and finally calculating the interest charges.

The Impact of Late Payments

There are penalties for late payments on Best Buy’s credit card. The late fee for the first late payment is $30, and it increases to $41 for subsequent late payments within 6 months. After 6 months of consecutive payments since your last missed due date, the late fee will reset to $30.

The Grace Period

A grace period is the time between the end of a billing cycle and the date your payment is due, during which you may not be charged interest on your credit card purchases. The grace period for Best Buy’s credit card is a minimum of 21 days.

The Pros and Cons

While the Best Buy Credit Card offers 5% back in rewards on all purchases at Best Buy, the high interest rate of 31.49% (variable) can lead to hefty interest charges if you don’t pay the full balance on your card. Plus, the deferred interest financing can be risky if you don’t pay off the full balance within the promotional period.

In conclusion, while the Best Buy Credit Card can be beneficial for frequent Best Buy shoppers who can pay off their balance in full each month, the high interest rate and limited redemption options may make other credit cards with lower interest rates and more flexible rewards programs more appealing for some consumers. Always do your research and understand the terms and conditions before signing up for any credit card.

Sources: Best Buy Credit Card, The Wall Street Journal, Credit Card Insider, NerdWallet