We’ve all had it happen. On our daily shopping adventures, we’ve walked in to our favorite big box or retail store only to be approached by an employee who asks us whether or not we would like a store card. If they don’t catch you at the door, there is a good chance that the employee checking you out will ask you if you would like to open a store card, usually offering perks such as 15 percent off your total today and 5 percent off every in-store purchase there after.
While these cards may seem like a good idea, especially if you are in a particular store often, they aren’t as beneficial as other credit cards. A few reasons why you should avoid opening a store credit card include:
They Can’t Be Used Elsewhere
The point of owning a credit card is to build up your credit, and this is done by occasionally using your card on various purchases – usually necessities such as gas or groceries. In-store cards can only be used in-store, and the stores that offer them generally aren’t filled with necessity items. So why have a card that can only be used in one location? You don’t ever want to be stuck needing gas with a card that can’t be used anywhere other than a department store so don’t even open a line of credit that can only be used in one location.
The Benefits are Limited
While in-store cards are typically no annual fee credit cards, which is a must have for any credit card, they don’t offer any other true benefit. While you may believe that you are getting cash back on credit cards that are single store bound in the form of 5 percent discounts or the occasional $5 off your next purchase, you really aren’t getting great rewards.
A good credit card will offer a variety of cash back rewards on multiple purchases including restaurant, gas, and retail purchases – not only will you get more for every dollar spent, but you will be able to use those rewards as you see fit.
They Will Make You Spend More
Similar to the psychology of couponing, getting a store card with the promise of 5 percent off every in-store purchase will actually be more likely to cause you to spend more than you normally would. That’s because when we believe that we can get a discount, we tend to spend more because we feel that it will save us more money. This is absolutely wrong – spending more is still spending more. So to avoid breaking your monthly budget, avoid the in-store card.
A good credit card should not only give you excellent perks for using it, but will give you the perks that will actually maximize your spending. Aside from airline miles and actual cash back, some credit cards even allow a percentage of your purchases to go towards a child’s college fund or your favorite charities. Don’t settle with an in-store card with only one type of benefit that will actually force you to spend more. Unless the card comes with a Visa or Mastercard logo, skip the offer and stick to cards that can be used anywhere.
Liz @ A Nut in a Nutshell says
The interest rates on in-store credit cards are ridiculously high too! I never use them.
Double Duty Mommy says
I get so annoyed when asked for an instore credit card. I know it’s their job but I’ve never gotten one and never will. Like Liz said, the interest rates are crazy!
HilLesha says
Great post!
Laurie says
In store credit cards are awful and the interest rates are ridiculous. They make it seem like a good deal.
Marcie W. says
Consider me instore credit card free and proud of it! I like my good credit, thanks LOL!
Donna says
I haven’t had a credit card of any kind in over 13 years. If I can’t afford to pay cash, I don’t get it.
Tricia nightowlmama says
I agree the interest rates for instore credit cards are nuts . I do use them to get discounts to purchase but then go to the service desk to pay it off before I leave the store
nicóle says
Yep!
Courtney says
I never want their card after having them previously..
Melissa says
Yikes! This definitely sounds important to be aware of!
Lolo @ Crazy About My Baybah says
I just read Tricia’s comment, and have not even thought to pay it off before you leave the store. Great idea!
Store credit cards are nuts!!
Zippy says
I do use some in-store cards because they have rewards attached to them, but I always pay them as soon as I get home via my online bill pay.
Anne - Mommy Has to Work says
I did get one for the discount, but paid in full and haven’t used it since!
Momstart says
I would lose it
Toni Patton says
The interest rates on the in store cards are so high. They are sometimes great for discounts if you can pay them right back off but overall not worth it.
Karen says
The interest rates are ridiculous on in store credit cards!
Pixie Deals says
Very good points!!
Becca says
I actually carry three in-store cards that I have had for years. I only use them if I happen to be in the store and want the discount that is usually associated with them. I always pay my bills in full and have never had to pay a high interest rate. I think they are like any other credit card – you have to use them wisely 🙂
Simply Being Mommy says
I never use store credit cards. In fact, I only use one credit card that earns me points and I pay the balance in full every month.
Karen says
All credit cards are really foolish, but I do have some..=(
Penelope (NYC Mom Blogger) says
I don’t get them either…more places to have my private info, more things stuffing up my wallet…I’m more of a declutterer and control freak.
Tammy says
I have one in-store card. It’s not used that often.
That Bald Chick says
I have two in store credit cards, which I only use for the discounts. I pay the balance immediately after using them, so I’m not charged any interest.
T says
The store employees have to offer them. There are contests for them getting sign ups. They can also get fired for not getting enough people to apply. I used to work at one such place.
Stopping by from the Alexa Drop Blog Hop! SavingtoaT
Momstart says
such terrible interest rates
Momstart says
The interest rates suck