4 Disadvantages of Getting a Retail Store Charge Card

Getting a retail store charge card is something that is very common because of discounts and promotions offered by many large retailers. Some people have a different charge card for all of the different stores that they shop at. Here are a few disadvantages of getting a retail store charge card.

1. Spend What You Do Not Have

One of the big problems with a retail charge card is that it allows you to spend money that you do not have. Most people do not have the willpower to stop themselves from spending money. This is why so many Americans today have so much debt. We spend more than we have when we have available credit. 

With a charge card, they expect you to pay back the entire balance every month. When you spend money that you will not be able to get back within the next month, it can cause you some serious problems. 

2. Late Fees

Another disadvantage of having a retail charge card is the late fees that are charged. If you do not pay your bill off in full each month, you will be charged a late fee for it. Sometimes, the late fees can get very expensive. Anytime you pay a late fee, it is money that you do not need to pay. Most of the time, you do not have extra money laying around that you want to spend on late fees. However, there is really no getting around it unless you want to damage your credit score. 

3. Affects Credit 

When you get a charge card, the credit limit that you have will affect your overall credit limit. If you are trying to apply for some other type of credit, you may be disqualified because you are already maxed out. Anything that you can buy at a retail store is usually not important enough to take up your precious credit. 

4. Increases Purchases

Retailers have done a lot of homework on their customers. They know that if they offer you some type of charge card, you will end up spending more money with them on average. They know that you do not think of the charge card in terms of real money. You think about paying it off as something that you will worry about later. It is not on your mind now and you can justify to yourself buying some extra things. 

You would never spend that much if you had to come up with the cash. However, when someone gives you a credit line, you would spend that much. This leads many people to spending more than they can afford and getting in over their heads. If you want to stay in control of your financial situation, getting retail charge cards is usually not a good habit to get into.

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