4 Reasons to Avoid Store Credit Cards

Though it may seem like a great idea at first glance, the smart thing to do is to avoid store credit cards. There are many reasons why these credit cards look like a good deal, but let's take a look at four reasons why you should steer clear of them the next time you are asked to apply. 

1. Higher Interest Rates

Typically speaking, when compared to a standard credit card, the interest rates on store credit cards are higher. This means you are going to end up paying more for the items in the long run. If you must use a credit card, it is easier to purchase your items on a traditional account with lower interest. Even if you intend to pay the balance in full, sometimes it isn't always possible, so the higher rates aren't worth it. 

2. Havoc on Your Credit Score

Having several store credit cards will eventually cause your credit score to go down, because you risk becoming overextended paying down all the debt. If you can use the cards responsibly, pay them all on time, and keep the balances low, they won't do too much harm. With no absolute guarantee of your ability to control the spending and make payments--it's a risk not worth taking for most people.

3. No Good Rewards

Traditional credit cards offer rewards, such as cash back on certain purchases, airline miles and other free items. These are perks you will not find with a store credit card. While the perks are not a good reason to get the card, if you are going to get a card, you may as well get one with additional benefits.

4. Limited Use of the Card

A traditional credit card will allow purchases in any store where the card is accepted. A store credit card will only be accepted in the store the credit card is for, and the store website. In other words, a department store card will not help you in the case of an emergency where food is required. Having a card for each store you shop at frequently is less effective than having one card that can be used anywhere you need them.

No matter how good it may look, resist the temptation to save money on your purchase by opening an account. Many stores offer shoppers a 10% to 25% discount on their purchase for the day when they open the account. While it sounds good, saving the money for the one purchase will likely only lead to debt later as you realize you can shop on the card whether or not you need to or have the money to do so. It's a win-win scenario for the store, not for you –the shopper.

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