Finance Globe

U.S. financial and economic topics from several finance writers.
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The Only Time a Store Credit Card Makes Sense

The Only Time a Store Credit Card Makes Sense

Many stores offer their own exclusive credit card. It is likely you have been presented with such an offer at the cash register. As tempting as it may be to sign on the dotted line, don’t do this just yet. Instead, ask for more information so you can review the offer before making a final decision.

The primary benefit of a store credit card is the savings you will receive. For example, you may hear the following from the cashier: sign up for a store credit card today and receive 15 percent off your next purchase. Sounds like a deal, right?

There is no denying the fact that this type of deal is appealing. This is particularly true around the holiday season when you know you will be spending money on gifts.

But here is the problem: store credit cards are notorious for having an extremely high interest rate. If you don’t pay off your balance in full, you may be surprised at how quickly it can spiral out of control.
For this reason, there is only one time when a store credit card makes sense: when you are 100 percent sure you will pay off the balance when it comes due.

If you have any doubt, think twice about making this decision. Even if you will save on your purchase, you are likely to lose all this money in the form of interest.

The holiday season is here. With this, you will be spending a lot of time at a variety of stores. If you have the desire to apply for a store credit card, it won’t be long before you have your chance to do so.

Will you sign up for an offer, use the card responsibly, and then pay off the balance when it comes due?

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Comments 2

Finance Globe on Thursday, 12 November 2015 10:05

Good post Chris, sometimes I cringe at the thought of adding new store cards on FG due to the high rates. Make sure your getting a no annual fee card as well. Hoping however that our users will be paying off these balances!

Good post Chris, sometimes I cringe at the thought of adding new store cards on FG due to the high rates. Make sure your getting a no annual fee card as well. Hoping however that our users will be paying off these balances!
Frank on Friday, 20 November 2015 16:46

I agree, sometimes people don’t even realize when they get a new store credit card that it is even an actual credit card! You always need to be very careful and understand the full financial ramifications of getting a new credit card. In some cases it can be beneficial, but make sure you understand all the fees and rates.

I agree, sometimes people don’t even realize when they get a new store credit card that it is even an actual credit card! You always need to be very careful and understand the full financial ramifications of getting a new credit card. In some cases it can be beneficial, but make sure you understand all the fees and rates.
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