Store Credit Cards: Are They Worth It?

OLYMPUS DIGITAL CAMERAIt has happened to all of us. We're in a retail clothing store, and the sales associates asks us the popular question, “Would you like to apply for our store card?” What do say? It's so tempting to say yes to receive that discount on your purchase or to receive other promotions, but is that really enough? A store credit card could also help you build up your credit score, but any credit card could do that.

Before you agree to sign up for a store card you should consider the fact that interest rates on store credit cards are MUCH higher than on non-store credit cards. The interest rates on store credit cards can range from 21.9% – 28.99%. High percentage rates defeat the whole purpose of that discount that just took off the tax. There's always two sides to everything. Store credit cards can lower your credit score just like it can help build it up. The more credit cards you sign up for even if you don't use them can lower your credit score. Most store cards have low credit limits, and it's easy to get your balance up high and lower your credit score. Lastly, another credit card means more temptation to buy more.

Notice the cons outweigh the pros in this situation. It's best to avoid getting a store credit card. A good tip: If you decide to get a store credit card, use your card to pay for your purchase to receive your points/discounts, and then pay for the balance that you put on your card immediately after.

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