Are Store Credit Cards Worth It? The Pros and Cons

If you shop at a department store, you’ve been asked to sign up for a department store credit card. While it may seem like they are offering a great discount, you should do research before immediately signing an application.


Depending on the department store, the cons may outweigh the pros. Opening a store credit card could improve your credit score, or lower it depending on the type of card.

How do you know what decision is right? Let’s look at the pros and cons of credit cards.

Cons of Opening A Store Card

Opening a store credit card on a whim would be a mistake. It may end up costing you money in the long run. Here are a few reasons why a department store credit card may not be for you.


High-Interest Rates

A department store credit card often has a higher interest rate than a credit card from a bank. On average, these interest rates are around 26%. Retailers have found that people that open a store credit card are less likely to pay it off on time.

Department Store Credit Card For Only That Store

When you’re opening a card, it’s best to ask if that card can be used at any other store. If you’re a regular at the store, it may be worth it, but if you only go to that store once a year, it won’t provide value.

Opening A Card And Never Using It

If you’re getting a card to build your credit but you never use it, it could actually hurt your credit. Every time you open a card, a hard inquiry shows up on your credit report. Too many of these are your credit card score can be negatively impacted.

Deferred Interest

If you struggle with paying off your credit cards in time, opening a new one with a deferred interest may not be the best idea. With no interest for 12 months or a longer time frame, most people forget they even have a balance. If you forget to pay it, you will end up getting charged the high-interest rate on your balance.


Pros of Opening a Store Card

Having a store credit card could be good for your credit score if you do it right. Researching the type of card you’re applying for will ensure you make the right decision.

Store Rewards And Discounts

If you frequent a store that is offering great rewards and benefits, it can be a good thing to get a card. You save money over the long term if you continue using your card and paying off the balance in time. You’ll be getting free money and rewards in return for spending what you were already going to spend.

Building Credit

If you don’t have much of a credit card history, you can still get a store card without much fuss. Most store cards offer instant approval. Using your card, making your payments on time, and keeping it open, are all things that will help build your credit score.

To Use Or Not To Use

As you can see, getting a department store credit card is something that requires thought instead of acting on impulse. With this guide, you can be sure that you’re making the right decision on a credit card.


If you’d like to learn more about how to manage your finances, read this article now.