At some stores, you may get offered an application for a credit card every time you pass by the checkout counter. Businesses can increase their revenues by offering credit, so they encourage their clerks to convince customers to fill out applications. Of course, stores usually also offer their customers an incentive. This might come in the form of an additional discount or delayed interest charges.
When to Consider a Store Credit Card
Some offers may be too good to refuse. Consider some reasons to consider applying for a store credit card:
- Financing offers: Having a chance to delay interest on an expensive purchase is really the same as a discount. You can make minimum payments and leave your cash invested until the promotional period ends.
- Discounts: New card holders might also be offered an additional discount on purchases they make with their new cards. If the purchase can be paid off right away, there won’t be any interest charges to offset the discount.
- Loyalty programs: Some stores also offer great loyalty programs to their card holders. They might have exclusive offers and deals that aren’t offered to anybody else.
- Ability to establish credit: It might be easier to qualify for a store credit card than a general card. Wise use of this card could help you improve your credit score in order to access other cards or loans.
Why Decline a Store Credit Card?
The promotional financing offers might sound like a great deal. However, they always end after several months. If you haven’t paid off your entire purchase by then, the creditor might be able to tack all the interest you would have paid onto your balance. They can also do this if you are ever late with a minimum payment. If either of these things happen, the promotional offer will end up costing you money and saving you nothing. It’s only a good idea to take advantage of one of these financing offers if you are sure that you can adhere to the terms.
You might also be tempted to buy things that you really haven’t budgeted for just because you have a store credit card. Obviously, the company will do everything in its power to send you offers for things that you might want but really don’t need. If you already have credit issues, you probably don’t need to open up another invitation to run up debt.
Finally, store cards are usually limited to that one store or chain of stores. If you only want to hold a certain number of credit cards, it’s probably a better idea to look for a general card that you can use almost anywhere.
Should You Take the Clerk’s Offer of a Store Credit Card?
If you tend to patronize a certain store regularly, you might benefit from additional discounts, promotional financing, and a good loyalty program. In other cases, you might be better off finding a general credit card that offers you more flexibility and may have more competitive rewards and interest rates.