Use Branded Cards Wisely For Cheap Shopping Thrill High Interest Rate May Negate Benefit Of Discounts For Preferred Customers

You saunter across the marble floor in Nordstrom and pull out your Visa to make a purchase. Not just any Visa - Nordstrom Visa.

You eye the heady titles of those in line at Waldenbooks but impress them by flashing your Visa. Not just any Visa - Waldenbooks Visa.

You’ve seen them now for some time: Visa and MasterCards bearing the names of airlines, telephone companies, car manufacturers.

But for shoppers who live and die by the cash register, who love to roam malls or are loyal to certain stores, Visas and MasterCards give you more than frequent-flier miles. How about shoes, books, hiking gear? It comes in the form of rebates from some of your favorite retailers.

While the Nordstrom card has been around for a year, REI, the Seattle-based outdoor equipment co-op, began offering a rebate on its credit card this past spring. And Waldenbooks is testing a Visa based on its Preferred Reader Program, offering points that can be used for free books.

Retailers are realizing that MasterCards and Visas are a lucrative market, especially as consumers abandon store credit cards that often carry high interest rates.

“If someone is a shopper, there’s (a card) for everybody,” said Robert A. McKinley, president of RAM Research Corp. in Frederick, Md., which tracks credit-card rates.

For Mary Murray, 37, of Huntington Beach, Calif., “As opposed to an airline card,” a Nordstrom Visa is the card to have. “I travel a lot - so I like to stay home on vacation. But I do like to shop.”

She began using her Nordstrom Visa while working for the store. Now with another company, she continues to charge to collect a maximum 5 percent rebate.

Whether you carry the card because you like a certain store or long for the perks, credit experts remind you it’s buyer beware.

“We get lured into thinking that we really can get something for nothing,” said Ruth Susswein of Bankcard Holders of America, a consumer group in Virginia.

“But each of these programs has caveats, so you really need to know what the offer is, and you need to look at the costs to you.”

First, check the interest rate. Typically the rates on rebate cards are higher. Some feature low introductory rates that climb after six months.

Some cards have an annual fee. Nordstrom eliminated its $25 annual fee in April after hearing from customers, spokeswoman Amy Jones said.

REI revamped its Visa card this past spring, adding rebates, lowering its interest rate and eliminating a fee. Response to the card has been about twice as much as the company expected, said Sue Brockmann, REI’s vice president of marketing.

Next, look carefully at the perks and restrictions. Usually, you need to charge a lot to get something.

For instance, the Waldenbooks Preferred Reader Visa awards cardholders who charge $500 with $5 certificates good for everything but magazines, newspapers and gift certificates at Waldenbooks. But to earn enough certificates for a $25 hardback book, you would need to charge $2,500.

The average person charges about $2,750 a year, according to Bankcard Holders of America, and carries a balance of $1,750 per card.

And that brings us to the bottom line, credit experts say: the balance.

Some of the many rebate cards that bring airline miles, telephone time and other awards have rewarded rebates for the size of a balance. Many give points for balance transfers; a transfer of $1,000 to the Waldenbooks card earns 200 points, the equivalent of $10 in certificates.

The danger lies in being unable to pay off the balance.

“It’s always the same thing,” said Jim Frannea, president of Consumer Credit Counseling Service of Orange County, Calif., whose clients include those in trouble with charge cards. “People say their intent is to initially pay off their cards in full, but pretty soon they have a large balance.”

Some credit-card users make a success of rebate cards, using them to pay for everything from vacations to groceries to earn benefits. At the end of the month they pay off the bill and collect the perks.

“But you have to know what you’re doing,” Frannea said. “You have to be a person who pays attention to detail and monitors your spending.”

Bankcard Holders of America publishes a brochure listing a variety of rebate programs - not just those from retailers - and analyzes the pros and cons. A copy costs $5. Write Bankcard Holders of America, 524 Branch Drive, Salem, Va. 24153. Ask for the rebate/frequent-flier list.