Outlaw FinanceEverything You Never Learned In School

If you have ever shopped at a department store you have been offered a 10% discount to open a store credit card.  While it may be tempting to open a new card and save that cash is it really worth it?  Unless you are going to make a payment right then and there to pay it off it is probably not worth it, and even then they may not be worth the hit on your credit score.

What makes Store Credit Cards bad?

1.  High interest rates Department stores will give a credit card to almost anyone.  With the ease of credit comes a high interest rate.  It is not uncommon to have interest rates above 20% on s store card.  I am sure the card in your wallet is less than that.

2.  Credit score hits If you go out shopping and open an account at every store you start to take hits on your credit score.  The more credit you have available can lower your score regardless of how much you owe.  Also multiple credit requests in a short period of time can and will ower your score.

3.  No rewards The credit card that you have in your wallet more than likely has some type of reward system tied to it whether it be cash back or a points system.  Most of your store cards are not going to provide this.

Store credit cards aren’t always bad especially if it is a store that you shop at regularly.  Just like all credit cards you need to make sure that you use them responsibly and don’t spend more than you would if you used cash.

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