As the economy recovers and the holiday season approaches, an increased number of people begin to consider and apply for a variety of new credit cards. Whether it is to handle some extra holiday spending or a way to earn perks for planned purchases, there are hundreds of credit cards out there that may promise a number of different benefits for their cardholders. Many different stores offer some line of credit, but it is not always worth it. How can you be sure that the store credit card in question is a valuable addition to your wallet? In the following article, we’ll discuss some questions you should consider before you apply for any store credit card.
What is the Introductory Interest Rate?
Many store credit cards lure individuals into signing up with low or non-existent interest rates, but fine print will often show that these terms do not last for very long. A seemingly reasonable line of credit can suddenly become an expensive accessory if you do not evaluate the terms accordingly. Thankfully, the US CARD Act that was passed in 2009 now requires that any and all introductory periods of interest as advertised hold those rates for a minimum of six months. While this should be enough time to enjoy the benefits and avoid an accumulation of holiday interest and debt, you will still want to have a game plan to eliminate this line of credit if the future rate is too high.
How Else Can I Get a Discount?
Many stores offer promotional discounts if you sign up for an in-store line of credit, but what they do not tell you is that there are often other ways to earn a discount on your current purchase. Some card applications will save you up to twenty percent on your purchase, but actions such as liking a store’s social media page on Facebook or signing up for emails can often yield similar short-term gains. A credit card is not something to be taken lightly: applying for a card in order to save a bit in the here and now is not a wise strategy.
How Will This Affect My Credit Score?
Any time you apply for a new credit card, your credit score is subject to an increase or decrease. Those who have limited credit or are new to credit cards can benefit from the application and use of a store credit card, but only if the use is responsible and they do not apply for several cards in rapid succession. Those who apply for too many cards in a short period of time can expect to see their credit score impacted. Likewise, anyone who has a high debt to income ratio can see negative impacts to their credit score if a store card overextends their projected ability to pay.
Conclusion
An in-store credit card can be useful for select purchases and earn you rewards in the process, but you have to be smart about its usage. You want to ensure that the interest rate is reasonable, that the application will not impact your credit and that you do not apply for the card as a quick way to save a few dollars. If these questions do not deter you, then consider signing up for one today!
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