Monday, September 15, 2008

Store Credit Cards-Is the discount really worth it??

“Would you like to open a store credit card and save 15% on your purchase today?” I hear that after almost every purchase I make from almost every store. The discount always sounds tempting, especially with those more expensive purchases, but is it really worth it?

I’m happy to say that I don’t have any store credit cards. Now before you think me nobel, let me explain. The main reason I don’t have a store credit card, is because I don’t shop that much at one single store to benefit from the discount. However, there are more important reasons that you should think before agreeing to that store card.

1. Just by applying for a store credit card your credit score drops 20 points. If you have a credit score that is considered border-line good/bad, this may drop you down to bad and hurt your chances at receiving a loan, or a decent interest rate on a loan.

2. The interest rates on store credit cards are obscenely high. Most are around 20%, which chances are, is more than that initial discount that you received.

3. If the store credit card you are applying for offers reward points, it usually takes a lot of purchases to receive that $10 store credit. You may find yourself purchasing more just to get the points.

Chances are sometime soon I will be opening a store credit. Probably to buy furniture for my apartment. If you do chose to open a store credit card, make sure you can pay off the total each month, or to close the card after paying off the total.

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All products are purchased by me unless noted otherwise. If a product is supplied for review, this does not affect my opinion. My opinions can not be bought.
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