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Presidential candidate Newt Gingrich under fire over accusations he and his wife received special treatment by Tiffany's.
After it was reported they -- up to 500000.
Dollars on that cart.
Oh my gosh but my next guest says with retail credit cards look it's not hard to amass a big bill.
John alzheimer's the president consumer education it's -- credit dot com.
Always great to see you John this story suggested baffles me these folks hadn't interest free card.
Yeah it's it's kind of -- that you can run up that kind of six digit balance.
I mean it balances actually closer -- -- nine dollars and was to zero dollars.
Yet not pay interest on it which is a little bit shocking I realized the stuff to Tiffany's have a lot of margin dealt with then that the product and at the end of the day.
The interest is run a profit as in the fact that it didn't get paid.
It -- a couple things -- either it was a no interest credit card them or someone was getting VIP treatment.
We know it's interesting because we gave Chris got such a hard time over -- countrywide loans -- get a special deal on interest rates.
That's what this story was this isn't that much difference if you don't pay interest on your credit card as you say you're giving away the profit.
Yeah and and they just -- thing is is that high end retailers.
Often cut deals with celebrity is.
Entertainers professional athletes.
And politicians because I didn't think about the Oscars this is a perfect example I happen people walking on that red carpet don't on the jewels that there -- door to door so it's not uncommon to make cut deals for VIPs what is uncommon.
As someone running for president during that.
-- -- It's not really something you -- -- DO -- so.
You would have been very consistent and say I don't like store credit cards they're horrible horrible or -- let's go over why don't like -- you say that -- interest rates.
If you get them and you're not the VIP are typically very high.
Yeah they're always very hide it's it's irrelevant what your credit score as -- usually interest rates are based on credits or not for retail card.
Your rate is generally going to be in the twenties even if you have fantastic credit.
You very low credit limits you can't borrow -- can't spend a lot.
Yet the problem is is that it even if you buy something pretty modest like a -- -- -- mean up a lot by Tiffany's necklace he maxed out on a retail store card.
On a normal -- -- and buying something modest can lead to a very highly utilized credit card.
Which is bad for your product limited usability you say when -- by that.
Well how many places can use your Macy's card once the Macy's.
Asserted that the there's no usability it's not like a general -- car -- -- everywhere so what it.
It actually acts as an incentive for you to have a lot of them because you feel like you have to have a car per retail chain because -- and anywhere else.
What about aggressive discount marketing what's the problem with that.
While there's nothing wrong with it and last year -- horse trading your credit reports for 10% discount -- the mall.
Very very dangerous to take advantage of those offers especially a lot of them -- very short period of time and are doing -- type of shopping -- back to school type of shopping.
Because you can load up on new accounts load up on credit inquiries again bad for your credit score.
Yeah I mean it really is look you can pick and choose your credit card you don't have to take something somebody offers you.
-- actually call up these companies and see if if they'll offer you one -- you don't have to be at the mercy of these companies should people be more aggressive in the way they choose their cards.
Yeah absolutely when you're thinking -- using classic if you choose to use plastic at least choose wisely.
Choosing a card that that -- a really high interest rates generally low credit limit is really no different.
The -- choosing to do business with the sub prime credit card -- and most people are not going to overtly she used to do that they're gonna choose a -- that house.
Why generally use.
Decent credit limits and also very reasonable interest rates which -- a credit -- -- believe -- -- not -- and about 15%.
Very very -- listen thanks for helping us out with this interesting stuff -- that who knew that a presidential candidate would be hearing such a high credit card.
Balance thanks John.
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