The Pros and Cons of Store Credit Cards

Offers are so tempting, but should you sign up?

You know you shouldn't, but all your friends are doing it. It feels so good, and you won't regret it, we promise!

No, not peer pressure of that kind. This is another kind of temptation -- shopping temptation, that is. Store credit card offers: they're easy to come by and tough to turn down. You can save money on the spot, gain access to exclusive offers and other members-only perks, and have a fallback cushion for those times when you need a gift or a last-minute outfit and are otherwise broke. Store credit cards sound great and are great... aren't they?

Well, yes and no. Here are the top pros and cons, as far as I'm concerned.

Pro: You'll save money on that initial purchase. Not only that, many stores offer 60- or 90-day grace periods after the first purchase. You might be able to soak up that, say, 10- or 15-percent discount, for a few months after you sign on.

Con: What a temptation to splurge! Ten percent can feel like a lot, but on a $50 purchase, that's just five bucks. That $300 dress will still cost you $270, and so on. Be smart: is saving ten percent a bonus when it just encourages you to spend, spend, spend?

Pro: You'll be privy to plenty of special deals, like those “Friends and Family” mega sales ever other week and special “Spend $75, Earn $25” insider offers. As a credit card holder, you may -- and should -- be treated like a VIP.

Con: The interest can be sky-high. I once bought $200 worth of Christmas presents that ended up costing me $800 after all was said and done (due to a few unpaid bills; shame on youthful me). Store credit cards are the devil if you have too many or don't pay every single bill on time, and in full (or as much as you can, anyway).

Pro: It'll help build up good credit. I signed up for one well-known department store card and have charged only a few big ticket ($100-plus) items over several years, paying each one off right away. It's been a great way to prove to creditors that I'm responsible and a safe risk.

Con: Signing up can hurt your credit rating, and so can getting denied for a card. I used to say yes to every single credit card offer, eagerly giving the salesperson that 45 seconds of personal info in hopes that I could save a few bucks on what I was buying. Bad, bad idea: credit rating companies are keeping track. Too many inquires on your report looks fishy -- which lowers your chances of getting approved for a car loan or mortgage down the road (aka, when it really matters).

My bottom line: tread carefully, and open only one to two store cards that you know you can look after responsibly. Any more is just asking for trouble.

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