Looking For A Bargain? Watch Out For Store Credit Cards!

As a shopper, you’ve probably had an experience where a clerk in the store you are shopping from will approach you offering you a very tempting discount rate if you apply for a store credit card. If you want to keep your finances in check, think very hard before you say yes or no to their offer.

Credit cards in general are getting more and more expensive nowadays. What with the credit crisis on going and the mad scramble among credit companies to cover their bases and ramp up their earnings before the credit card bill becomes active. If you put store-issued credit cards into the mix, you could be getting into something much worse.

There are a number of things you should look into before you give your OK for a store credit card. First, store credit cards usually have higher interest rates compared to regular credit cards. If you miss one month of payment, you are going to lose the starter discount and your rates will go way up. While store credit cards do offer rewards, these are usually targeted to encouraging you to keep shopping in their store. That means you will be missing out on the cash back and airline mile perks of regular credit cards. Store credit cards also have a very different way of handling disputes. If you make a purchase on your card and you are not happy with the purchase, it is quite likely that you will have a hard time stopping payment to that purchase.

Store credit cards are not all bad, however. There are some pluses for getting a store credit card. For one thing, store credit cards are easier to get than regular credit cards. Thus, if you are looking to build up your credit, you can probably do it easier using store credit cards. Store credit cards usually report to credit bureaus promptly so, if you can keep your credit healthy, then you can expect some pluses on your credit score. Finally, because store credit cards are limited to its issuing store, if your card gets stolen, the thief is basically limited to that store. Getting your card revoked is much easier too.

Store issued credit cards have their benefits. This is especially true for smart spenders. As long as you are smart in using them, you can easily get the benefits without getting hit with the penalties. So, if you are tempted to get a store issued credit card, make sure that you can trust yourself to make intelligent purchases and to pay off the monthly balances. Otherwise, you should really just say no and move on.