The Pros And Cons Of Retail Credit Cards
We’ve all been out shopping and have been tempted by the immediate and significant savings you can get by opening a store credit card. Like everything when it comes to finances, store credit cards are neither good nor bad but should be approached with caution and awareness.
Store credit cards can be good for some people and terrible for others. More than anything it depends on your own financial history and habits. Do you already have a ton of store cards? If so you might want to skip it. Do you shop at this store all the time and can save a bundle? Then maybe it would be a good thing for you.
Here are a few of the pros and cons of store credit cards and what you should think about before you apply...
The Pros
If you have good financial habits and don’t already have a ton of cards then a store card could be a good thing. Store cards often tie into rewards programs and additional savings at stores and across brands. If you are someone who shops at a store often you might actually be able to save by using a store card and taking advantage of those perks. The key is making sure you don’t carry a balance so you can avoid interest. Many of these cards allow you to pay off your card in cash or with a debit card right after you use it!
Store cards can also be good for people with no credit history because they are often easier to open. A store card can be a good first card because it limits you to a lower balance and you can only use it in certain places (unless it has a MasterCard or Visa tie in).
The Cons
Store cards can be damaging to your credit if you open or apply to too many. You should never open a card at a random store just to save money in the moment.
The biggest con is the fees and interest rate, which is easy to overlook when you are offered a big discount. If you don’t pay attention you may find yourself signing up for a card with more fees than a normal credit card and a much higher interest rate. According to CreditCards.com a retail credit card has an average APR of 24.99 percent compared to the 16.15 percent APR normal cards carry. If you carry a balance you can find yourself racking up interest quickly.
Consertar o seu crédito pode ser tão simples como fazer uma chamada! Estamos aqui para o ajudar a reconstruir e a compreender o seu crédito. Ligue-nos para começar ou saiba mais sobre o que podemos fazer por si 1-800-431-0449.