Be Careful with Department Store Credit Cards

If you are someone that gets weak in the knees when shopping at the mall or can’t pass up a discount or a coupon, you might find yourself ruining your credit in just one trip to the mall. It’s important to be cautious with this type of card so I’ve provided a few tips on how to deal with department store credit cards.

The fact is that more and more department stores are offering their own store credit cards. While these may seem convenient and may appear to be a great way to get a quick 10 – 15% discount at your local department store, applying for these credit cards can actually be more expensive than you might first think.

Many department store credit cards offer special discounts that are available only to those that use a store credit card. Obviously, this is an incentive put into place to get you to use their cards. The downside is that these cards typically have a much higher interest rate than non-department store credit cards. Therefore, if you don’t pay the card off each month, you’ll likely pay much more in finance charges than you would with a traditional credit card.

I personally make sure to pay off all of my credit cards each month. But with department store cards, you HAVE to make sure you pay it off every month.  Even if I have to carry a balance on my other credit cards, for whatever reason, the department store cards get paid off in full. I absolutely refuse to pay the finance charges associated with these cards.

Getting hit by high finance charges is not the only problem with these cards though. Another problem can arise if you go from department store to department store filling out their applications so you can take advantage of the great deals. It’s generally ill-advised to fill out numerous credit card applications in just one day like this as your credit score can be negatively impacted by numerous inquiries of this sort.

I am not opposed to obtaining department store credit cards. You really can take advantage and save some pretty good money with these cards, but only if you use them right. Just try to avoid applying for a number of them at one and make absolutely sure to pay off these cards when the bill comes due.

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This entry was posted on Friday, November 23rd, 2007 at 11:19 pm and is filed under Tips & Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.