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Store Credit Cards Basically Suck. Here’s Why

If you’re doing back-to-school buying, you’ll likely encounter an employee pushing a store a credit card that gives you an instant deal, such as 20% off on the spot. A recent survey of several of those cards found the rate of interest could cost consumers far, far more than they would expect.

Consumers often do anything to save a buck, and these stores know that. Oftentimes, merchants will conserve their best ammunition for last, An opportunity to get an additional 15, maybe even 20 percent off at the register by signing up for a store credit card.

A recent questionnaire by creditcards.com found that customers may minimize investments during that moment, but spend for them down the line. The questionnaire looked at the small print on cards from 36 of the country’s largest sellers.

The typical annual percentage rate, or APR, was 23.23 percent, a whopping eight points above the average credit card.

Amongst those with the greatest, jewelry expert Zales, with a rate of around 28.99 percent, Home Depot, and Staples, and Best Buy, as high as 27.99.

Repaying a balance in full monthly makes high interest a moot point, and motivations like store discount coupons and special sales can be excellent, particularly at the back-to-school time, and during the vacations.

However shoppers should bear in mind the number of offers they accept. According to Bankrate, applications for those cards urge questions on a credit record, and a lot of those could place a damage in a credit score.

The bottom line here is, they’re trying to screw you on those interest rates, and the only way you can make sure that doesn’t happen, and screw them back in the process is to pay your balance in full each month. Only sign up for one of these cards if you’re making a large purchase where 20% becomes worth your while. You have to ask yourself if that discount is worth an inquiry on your credit report. And with mall stuff, that answer is usually no.

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