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October 2014 Retro Gaming Article


October 17, 2014 Retro Gaming Blog Post:

GameStop initiates a new revenue stream via PowerUp Rewards credit card with a 27% interest rate

Are you dying to buy a Wii U or PS4, but lack the funds? GameStop would love to qualify you for their PowerUp Rewards credit card and charge you a high interest rate to become a Generation-8 console owner. But is it worth it?
GameStop credit card
Credit cards are evil. While they may be helpful from time to time, their existence is solely to lure card holders into spending money they do not have. This takes the form of a "loan" upon which interest is charged. Since this form of credit/loan is liberally dispensed, the interest rates are often ridiculously high.

Most retail transactions involve a clerk asking the customer if they want to sign up for the store's credit card. Often they dangle a 10% discount on your current purchase. Don't be fooled - this is generally a bad idea. Going into debt over a game console or video games is not a financially wise move with a standard variable APR of 26.99% based on Prime Rate.

Video games are fun, but being charged an exorbitant interest rate and going into debt is not fun. If you were to pay the minimum payment on the charge for a PS4, you may find yourself paying 3 times the price of the console over several years. The monthly bill seems low, but over time you've spent a king's ransom on a game console!

All the while, this puts money into GameStop's pocket (in this example) via the credit card program financed by a backing bank. Keep in mind GameStop is not offering better service, better prices or anything that benefits gamers. They are simply deriving revenue from your bad decision to pay for merchandise via their credit card!

Luxury vs Necessity

As a consumer, I might be willing to pay more if I get more, but extending credit to customers of a video game store seems suspicious. Video games are a luxury item and as consumers we need to send a message to retailers that they can't generate more income by preying on consumer desires to own the latest, greatest items.

Buying above our means with credit cards is almost a way of life for some folks, but you may want to regain some perspective. Retailers and the banks backing these store-centric credit cards are getting rich off of your interest payments.

I'd rather save up for 6 months than contribute to a system that rewards greed at my expense. I would applaud GameStop for devising an innovative way to boost sales of gen-8 consoles and get these wonderful machines into the living rooms of more gamers. But that is not the focus of a credit card program. It creates a revenue stream that exists for no good reason. Luring consumers to overspend so the retailer can benefit from the financial arrangement is awful.

I shop at GameStop and I don't mean to single them out as though they are the only retailer who attempts to benefit from consumer credit card programs. What I don't like about most retailers participating in these programs is the greed and deceit they exhibit toward their customers - aka: their lifeblood. GameStop does not sell anything that should be promoted to consumers as a vital necessity. Their entire inventory is luxury items. Badgering consumers to sign up for a credit card in order to buy a video game is pretty low.

So, stop asking me if I want to save 10% on the $8 used game I'm purchasing... I don't want your credit card.

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