A recent report from LendingTree® said that 44% of consumers planned on opening a store credit card this season. However, that same report said that 56% of those who have had store credit cards in the past have regretted getting them.
Sure, those sign-up bonuses can be great but if you carry a balance on one of these cards, the interest you pay with those high APRs can easily exceed what you saved with that initial discount stores offer.
While the salesperson does a great job of talking about the perks and discounts you can get when you sign up, they almost never do an equally great job of talking about the interest rates and high payments you’ll have when you use it. In fact, the average APR for a new store credit card is 24.24%.
Here are a few tips from LendingTree® for getting the most out of a store credit card:
- Beware of deferred interest: While special financing deals really can save you big bucks, it’s crucial that you play by the rules, because what you don’t know can cost you.
- Know APRs and fees before you apply: This is good advice with any credit card, but it’s particularly important with store cards because the interest rates are so high, and the pressure is often on to make a quick decision.
- Anticipate deadlines, exceptions, spending minimums: Virtually every card has quirks and nuances. The more you know about them before you apply, the better.
- Look for the other logo: Some store credit cards can only be used with one retailer or one group of retailers. Others can be used most anywhere. That’s an important distinction.
- Resist the pressure: If you’re offered a card and you aren’t sure what to do, say no and then read up on the card later. If the offer still sounds good to you, apply next time you shop there.
Or, you could bypass all of the potential downfalls of the store credit cards and seek alternatives from Scient Federal Credit Union.
We offer personal loans at interest rates as low as 6.99% APR.* While you won’t get 20% off your first purchase at your favorite store, you won’t be one counted in the 59% of people with buyer’s remorse after opening that store credit card. You’ll also enjoy a much lower interest rate, which equals much lower monthly payments.