Most retailers nowadays have their own specific store-branded credit cards! You’ll notice that they often ask their customers to sign-up for them since many of them promise to reward account holders with exclusive discounts and perks.
Applying for them can be tempting, but before you sign up for a store credit card, there are a few things you’ll need to think about! So continue reading below to see some of the pros and cons of applying for a store credit card.
Pros of Owning A Store Credit Card
Sign-Up discount
At times when you first sign-up for a store credit card, you receive a discount on the items you are purchasing as well as working with other discounts. So depending on the size of your purchase, you can save a lot by just signing up on the spot.
Regular discounts
Nowadays most retail stores provide customers who own their credit card with additional discounts that they can use throughout the year. Sometime the discounts are stacked onto a regular sale being offered to all customers.
So when a retailer is having a sale and certain items are 20% off, customers who own the store credit card may be eligible for an additional discount.
Buy what you want, when you want it
So if you own a store credit card, you may not have to save up for some of the items you want to buy. With traditional credit cards, you can put the purchase on your card and then pay it off once you have the money. So as long as you are responsible with your card, owning a store credit card can help improve you credit score.
Cons of Owning A Store Credit Card
High interest rates
Yes, store credit cards can offer you a number of discounts, there is a price to pay for this perk! They are known for their high interest rates. Before signing up for a store credit card, do know that the rates on a store credit card tend to be much higher than those associated with traditional credit cards. So if you’re not careful, you might end up paying a lot of interest.
Harm your credit score
When you’re applying for a store credit card or getting one can cause your credit score to drop slightly. So if you have bad credit, you might need to wait until your credit score improves before you take on anymore debt.
Less beneficial than traditional credit cards
Store credit card have smaller credit limits than a traditional credit card. So it’s easier to rack up debt with these kinds of credit cards, but if you use too much of your available credit, you debt-to-credit ration will go up and your credit score could drop.
Bottom Line
You may think that signing up for a store credit card is a good idea at the item, but always keep your financial goals in mind and how owning a store credit card might affect the ability if you reaching those goals.
If you’re looking for a credit card, you can check out the latest credit card bonuses that you can sign up for and while you’re here on HMB, you can also read through our credit card reviews to see which card fits your needs the most! First time card owner? Read our guide on How credit cards work!
