Store Credit Cards: Pros & Cons
Every time you check out at a retail store, do you recognize the statement, “would you like to save 10% on today’s purchase?”
You are getting asked this at all your favorite retails stores, because they are looking to have you open a new store credit card. This is something that is enticing you to potentially save some money on that current purchase. Who doesn’t want to save money, so many consumers choose to accept the offer. However, do you know when you answer “yes”, that is giving that company to pull your credit and potentially affecting your credit score?
Any time anyone applies for new credit it affects your credit and it also affects your overall outstanding bills you are now going to have to pay. Are these things that you think of when making that split second decision to say, “yes I would like to save 10% with that new credit card?” According to bankrate.com, there are some pros and cons to retail credit cards.
Pros
• Promotions, discounts and other perks.
• Helps build credit history.
Cons
• High interest rates.
• Low credit limits.
• Lowers your credit score.
• Another spending temptation.
Once consumers have these sorts of credit cards and all other types of credit cards, it creates a potential financial hardship if there is a life changing event (ie- job loss, pay reduction, loss of spouse etc) that could put a consumer in a tough situation. Debt consolidation and debt settlement companies are great services to look into if you are buried in the debt. Leadpile Lead Exchange works a lot with these lead types, and I have to say in recent months there has been a lot more activity in those verticals. This tells me that too many people said “yes I would like to save 10% on this purchase”. Think before getting that next new credit card!
I’ve fond that those store cards have high interest rates most of the time. This can hurt negate the money you saved by using the store card if you don’t plan on paying your bills on time.
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