What you need to consider before you take a store credit card offer
Will a Store Credit Card Really Help You Save?
In this video April Lewis-Parks explains when it makes sense to get a store credit card versus when you’re better off turning down the offer. Retailers spend a lot of time, money, and advertising effort trying to convince you that you’ll miss out if you don’t sign up for a store credit card. But are those discounts that they’re offering you really worth it?
April Lewis-Parks, Director of Education for Consolidated Credit: Hi, it’s April with Consolidated Credit and this is Ask the Expert. Our question for today is: Is it worth it to open up a new credit card to get a store discount?
And really, the answer is it depends. If you’re going to do a lot of shopping at that one store and they give you 20 percent off or more, and then they give you coupons and special loyalty discounts on top of that, then go for it. It can be a great deal.
But you have to be aware that you have to pay it off before the bill arrives to get the discount. If you don’t pay it off before the statement date, you’ll usually get hit with 24 to 35 percent interest, and that will wipe out any of the savings that you earned from the discounts.
So, if you can use the card and pay it off every month before the bill hits your inbox, then go ahead. But, if you carry a balance, forget about getting the new card and just pay in cash. It’ll save you more money in the long run.
Are you already carrying credit card balances over each month? Talk to a certified credit counselor to explore options to pay them off.