Store credit cards can offer great incentives, but only with even greater interest charges.
How to Decide When Store Credit is a Good Idea
The rewards and incentives offered at checkout can make store credit seem like a smart move, but with high interest rates and hidden contract terms you have to be careful when it comes to using in-store credit card lines. Consolidated Credit President Gary Herman explains how to use them strategically.
Am I tempted to get an extra 10% off when they tell me all I need to do is apply for a card? Absolutely. Someone who has good credit, it’s really nominal and if you’re making a big enough purchase – a thousand dollar purchase – saving 10% is a $100.
But people who are in the process of rebuilding their credit, don’t have perfect credit – unexpected expenses happen. People get sick, people change jobs, and you’ve got this debt and before you know it, it turns into a cycle of debt and you’re paying interest every single month. As long you’re being responsible, and you’re paying these accounts off at the end of the month, if you can get an advantage by applying for a new card or by acquiring points or by acquiring multiple points because of the type of purchase it is, I encourage that.
If you’ve run into trouble with store credit, talk to a certified credit counselor to discuss options for getting out of debt.