Money Stuck On Credit Cards

I've come across a situation lately where I think I'm going to end up with some money "stuck" on a credit card and I'm wondering how to get it off. Here's the scenario. I purchased some clothes online from the Gap and Old Navy. I have 90 days to return any items I don't want but my credit card is due in less than thirty days. So if I don't get the items returned before my credit card bill is due (my fault, I know), I will have to pay the bill in full even though I know I have a significant refund coming my way. Then I will have a credit balance on the card and the money will be stuck there until I make another purchase at one of these stores, which I'm not planning to do anytime soon since I just bought all the clothes I could possibly need for a while. This effectively turns my refund into a store credit and ties up that cash for months.

I don't like this scenario. Had I not paid with a store credit card, it wouldn't be a problem. I could just use the credit to buy gas or groceries or whatever I wanted. But I paid with my Gap card so I could earn 5% back. I could accomplish the return immediately by driving to both a Gap and an Old Navy, but the amount of money that would cost me in gas is a little ridiculous since they are not near my home (hence the online shopping in the first place--shipping is cheaper than gas).

Moral of story: Store credit cards have hidden drawbacks that other credit cards do not, so use them carefully.

Photo by kewfriend

Related posts:
My Thoughts on the Gap Store Credit Card
How Opening New Credit Cards Affects Your Credit Score

2 comments:

Paula said...

I have always avoided store cards as the APR on them is one of the highest on the market. You can get various benefits such at 10% off all purchases with the card, but they are offset by the sheer interest rate if you do not pay back the balance in full on a regular basis. If you like to use plastic then it would serve you better to use normal credit cards as the APR is lower and these cards will offer their own benefits.

Anonymous said...

This recently happened to me when I purchased something on a Kohl's card. I have a small balance and figured I'd just leave it there until I figured out what I wanted to do. But then after a couple weeks they sent me a letter stating basically that if I did nothing, they would send me a check for the balance they owed me. So in a couple more weeks, they sent me a check. Easy for me and I got my money back without having to buy something with it. Maybe it will work for you.
BTW, I really enjoy reading your blog. I am a thrifty person as well and am always looking for better ways to save money!
MH