Credit Card Lowdown: The Lowdown On Store Credit Cards

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The Lowdown On Store Credit Cards

You are a shopaholic if you go to the mall whenever you feel the urge like millions of other Americans. Not surprising as credit cards have been perpetuating spending and most of us end up buying things we don’t need or more importantly afford.

Seeing how addictive and compulsive you are with your shopping, your favorite stores now issue "store credit cards" to encourage your shopping habit. Store credit cards are the easiest to open and are much faster than a bank credit card. The lure is all the accumulated points and the freebies that stores offer to entice the customer.

Drawbacks: By opening store credit cards you are in fact playing with fire as every time you begin a new store card your credit score comes down 20 points. Plus the added debt you are piling on yourself and this is true each time you get a new store credit card.

So what are the stores aiming to achieve by extending these credit cards chock full of perks? They are simply ensuring you go back there for all your shopping and nowadays after several years of loyal shopping, stores also give rewards. The rewards are the baits to get you back into the store and usually you’ll like something and end up making more purchases and that is the marketing strategy here.

The interest rates are high especially when there are 0% credit cards in the market. The rewards and discounts still don’t justify the high interest these store credit cards charge.

Use them wisely: The trick is to watch and go to these stores during sales and only when you really need to buy something specific. The binge shopper should stay clear of these store credit cards and even if you go in make sure you never go overboard with your shopping.

Read: “Store credit cards: flashy perks, high rates”, for a comparative look at famous stores and their credit card lures and their interest rates vs. rewards equation.

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March 26, 2006 in Reviews | Permalink