Store Credit Cards

The store credit card is usually offered up with a temping teaser to get you to sign up. Sometimes it is 20% off your first purchase or 0% financing for 12 months. However, you need to beware of store credit cards.

1) They hurt your credit score. Do not open a store credit card before you want to buy a car or a home.
2) If you get a good financing deal in the credit card teaser and you do not pay back the balance before that special financing window is over you will be in for a rude awakening when you are paying a 22% interest rate back-dated to the time of purchase.

3) Store credit cards always have a high APR so you cannot carry a balance on them.

Now if you have good credit and have a home and car and plenty of emergency funds then it can be ok to get that Best Buy card or Kohl’s card. Just understand that they are not like typical credit cards.

Written by Nagel on November 27th, 2006 with no comments.
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