Should I Get a Store Credit Card?

With the holidays fast approaching, you may be considering getting a store credit card to take advantage of any holiday sales or deals. But is it really worth it? In short, it depends. Store credit cards generally have high interest rates and low credit limits, which can be a recipe for disaster if you’re not careful. However, if used responsibly, a store credit card can actually help you build your credit score.

The Pros of Store Credit Cards

There are a few potential benefits to getting a store credit card. For one, many store credit cards offer sign-up bonuses in the form of discounts or points that can be redeemed for future purchases.

Additionally, many store credit cards offer exclusive deals and discounts to cardholders that are not available to non-cardholders. Finally, if you frequently shop at a particular store, having a store credit card can help you rack up points or rewards that can be redeemed for free or discounted merchandise.

The Cons of Store Credit Cards

However, there are also some drawbacks to consider before you sign up for a store credit card. Firstly, store credit cards generally have much higher interest rates than traditional credit cards. This means that if you carry a balance on your store credit card, you will end up paying more in interest over time.

Additionally, store credit cards typically have relatively low credit limits, which can make it easy to max out your card if you’re not careful. Finally, if you decide to cancel your store credit card, make sure to do so within the grace period so as not to damage your credit score.

You could end up spending more than you planned. It’s easy to get caught up in a “I’ll just put it on my card” mindset when you’re out shopping. If you’re not careful, you could find yourself racking up debt on your card—and paying interest on that debt if you carry a balance from month to month.

You could be tempted to overspend at that particular store. Store cards are typically only accepted at the retailer where they were issued, which means you may be tempted to spend more money there than you would have otherwise. If you’re trying to stick to a budget, this could be a problem.

Your credit score could take a hit if you misuse the card. If you miss payments or exceed your credit limit, your credit score will suffer—and that can make it harder and more expensive to borrow money in the future.

We recommend avoiding store credit cards. Most of them have unreasonably high interest rates and terribly terms if you don’t pay it off quickly.

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