When purchasing furniture for your home or office, it’s often a significant investment. Whether you’re buying a new living room set, dining table, or office furniture, the price tags can be overwhelming. To ease the financial burden, many furniture retailers offer furniture credit cards, which are specialized store-branded credit cards designed to provide flexible payment options, promotional financing, and sometimes exclusive offers.
In this article, we’ll explore what a furniture credit card is, the benefits and drawbacks of using one, and tips for managing it effectively. Additionally, we’ll highlight some popular furniture credit cards offered by major retailers and how they can help you furnish your home without breaking the bank.
What is a Furniture Credit Card?
A furniture credit card is a store-branded credit card offered by furniture retailers, often in partnership with financial institutions like Synchrony Bank or Wells Fargo. These cards allow customers to purchase furniture and home décor on credit, with the option to pay off the balance over time.
One of the key selling points of furniture credit cards is that they frequently offer special financing options, such as 0% interest for a set period (often six months to five years, depending on the retailer). This can make them an attractive option for people looking to make large purchases but avoid paying interest if they can pay off the balance before the promotional period ends.
While furniture credit cards can be convenient, it’s important to understand the terms and conditions of these cards. The interest rates on these cards can be higher than those of standard credit cards, particularly if you don’t pay off the balance within the promotional period.
Benefits of Furniture Credit Cards
1. Special Financing Options
One of the biggest draws of furniture credit cards is the availability of special financing. Many retailers offer promotional periods with 0% interest for a specific timeframe, which can range from a few months to several years. This allows customers to spread the cost of their furniture purchases over time without incurring additional interest charges, provided they pay off the full balance within the promotional period.
For example, some furniture retailers offer financing options like 12 months same-as-cash or 48-month equal payments with 0% APR (Annual Percentage Rate). This can make large purchases more manageable by allowing you to break the total amount into smaller, monthly payments.
2. Exclusive Discounts and Offers
Furniture credit cardholders often have access to exclusive discounts and promotional offers. Retailers may provide cardholders with early access to sales, special coupons, or member-only pricing. This can help you save money on furniture purchases, especially during holiday sales or clearance events.
For example, a furniture retailer might offer 10% off your first purchase when you sign up for their store credit card. These offers can be enticing, particularly if you’re furnishing a new home or apartment and need to buy multiple items at once.
3. Increased Purchasing Power
If you’re buying large furniture items like sofas, beds, or dining room sets, you may not have the cash on hand to pay for everything upfront. A furniture credit card increases your purchasing power by allowing you to make the purchase immediately and pay it off over time.
This can be especially helpful if you’re redecorating or furnishing a new home and need multiple pieces of furniture at once. Instead of waiting to save up enough cash for the entire purchase, you can get the furniture you need right away and pay it off over several months or years.
4. No Annual Fees
Many furniture credit cards come with no annual fee, making them more attractive for occasional users. You can use the card whenever you need to make a large furniture purchase without worrying about extra fees just for having the card.
This feature can be especially appealing if you’re planning on using the card exclusively for furniture purchases and don’t want to maintain an additional credit card with recurring fees.
Drawbacks of Furniture Credit Cards
1. High Interest Rates
While furniture credit cards can offer 0% interest during the promotional period, the standard interest rate on these cards tends to be much higher than that of regular credit cards. Interest rates can range from 20% to 30% APR, which can significantly increase the cost of your purchase if you don’t pay off the balance within the promotional period.
For example, if you finance a $2,000 sofa with a furniture credit card at 0% interest for 12 months but don’t pay off the full balance in that timeframe, you could be hit with deferred interest charges, which could add hundreds of dollars to your final cost.
2. Deferred Interest
Many furniture credit cards come with deferred interest terms. This means that if you don’t pay off the entire balance within the promotional period, you’ll be charged interest on the entire original balance from the purchase date—not just the remaining balance.
For instance, if you finance a $3,000 dining set with a 24-month 0% APR offer but only manage to pay off $2,500 within those 24 months, you could be charged interest on the full $3,000 from the date of purchase. This can be a costly surprise for those unaware of how deferred interest works.
3. Limited Use
Furniture credit cards are typically store-specific, meaning you can only use them at the retailer that issued the card. If you’re looking for more flexibility or the ability to use the card at various stores, a general-purpose credit card with a lower interest rate might be a better option.
These store-branded cards won’t provide the same utility as a traditional credit card, which can be used for any type of purchase and at different locations. If you don’t regularly shop for furniture, the card may sit unused for extended periods.
4. Potential Impact on Credit Score
Opening a new credit card account can impact your credit score in several ways. When you apply for a furniture credit card, the lender will perform a hard inquiry on your credit report, which may cause a slight dip in your score. Additionally, if you carry a balance on the card, it could increase your credit utilization ratio, which could lower your score further.
However, responsible use of a furniture credit card—such as making timely payments and keeping your balance low—can help improve your credit over time.
Popular Furniture Credit Cards
Many well-known furniture retailers offer their own store-branded credit cards, often in partnership with financial institutions. Here are some popular options:
1. Ashley Furniture HomeStore Credit Card
Issued by Synchrony Bank, the Ashley Furniture credit card offers special financing options, including 6, 12, 36, and 60 months financing, depending on the purchase amount. Ashley Furniture frequently runs promotions that offer cardholders 0% interest for a certain number of months.
2. Wayfair Credit Card
The Wayfair credit card offers no interest financing for up to 24 months on purchases over $499. Additionally, Wayfair cardholders earn 5% back in rewards on Wayfair purchases, and there is no annual fee.
3. Rooms To Go Credit Card
The Rooms To Go credit card offers interest-free financing on select purchases and exclusive cardholder promotions. With terms ranging from 6 to 60 months, cardholders can take advantage of flexible payment options for large purchases.
Tips for Managing Your Furniture Credit Card
If you decide to use a furniture credit card, it’s essential to manage it responsibly to avoid high interest charges and debt accumulation. Here are a few tips:
- Pay Off the Balance Before the Promotional Period Ends: Avoid deferred interest charges by paying off the full balance before the promotional period expires.
- Make On-Time Payments: Late payments can result in fees and could impact your credit score. Set up automatic payments or reminders to ensure you pay on time.
- Avoid Carrying a Balance: If possible, pay your balance in full each month to avoid high interest rates. If you must carry a balance, aim to pay more than the minimum payment to reduce interest charges.
- Read the Terms and Conditions: Before applying for a furniture credit card, carefully read the terms and conditions to understand the interest rates, fees, and promotional offers.
Conclusion
Furniture credit cards can be a helpful tool for financing large furniture purchases, especially with promotional financing offers like 0% interest. However, it’s crucial to use these cards responsibly and understand the potential drawbacks, such as high interest rates and deferred interest. By paying off your balance before the promotional period ends and making timely payments, you can take full advantage of the benefits these cards offer without falling into debt.
