Pros and Cons of using a store credit card

You are shopping at your favorite store. While ringing up your purchase at the counter, the cashier asks you if you want to save 20% by getting the store credit card. Is this a good deal?

When it comes to using a store credit card, there are both pros and cons, and it is important to be aware of them.

Pros:

1. Discounts: Some store credit cards give you money off when you buy things. This can be a big saving if you shop there a lot.
2. Special Deals: Some store credit cards might let you pay for things over time without extra costs. This can be helpful if you need to buy something big and can’t pay for it all at once.
3. Build Credit: A store credit card can help you start building a good credit history if you don’t have one yet. This is important for things like getting a loan or renting a house in the future.

Cons :

1. High Interest Rates: Store credit cards usually charge a lot of interest (that’s bad!). This means if you don’t pay off your balance every month, you’ll owe a lot more than you spent.
2. Limited Use: Usually, you can only use a store credit card at that specific store, which isn’t as useful as a regular credit card.
3. Temptation to Overspend: Having a credit card for your favorite store might tempt you to buy more stuff than you need or can afford.
4. Credit Score Impact: If you apply for too many cards, or if you don’t use the card responsibly (like not paying on time), it can hurt your credit score.

The stores are counting on you trying to get that quick savings, and then not paying if off right away. Then the cost of your item will balloon way past the original discount they gave you. That delay in paying off the card will cost you more and only serve to cause you problems.

True, 20% is a great savings, but not if it ends up costing you more in the long run. Be very careful! Be smart with your money, and think before you agree to jump for that store credit card.