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April 16, 2018

Store Credit Cards: Are They Ever A Good Idea?

Man standing with his wallet taking out his store credit card

You’re hard-pressed to make a purchase without the cashier asking if you’ll be paying with your store card. Sure, many cards come with percentage-off discounts, but is it really worth it?


Risk vs. Reward

Like all credit cards, store cards aren’t necessarily bad—so long as you pay the bills in full every month. In fact, not carrying a balance on the card is good for your utilization rate (the percentage of available credit being used, which has a huge impact on your credit score). However, you should note that having too many revolving accounts can negatively affect your score.

In some circumstances, using a store card is actually good for your financial health since many stores offer discounts on purchases made using their branded cards. As soon as you’ve made the payment with your store card, ask the cashier if you can pay your bill at the register. This way, you get the reward without the risk of debt.

What if you have too many cards?

Most people who end up in debt start with the best of intentions (“Of course I’ll pay the bill in full every month!”). But, due to any number of circumstances or choices, interest accrues and balances increase month after month. Making matters worse, many store cards come with exorbitant interest rates that negate any percentage-off discount.

If you’ve found yourself drowning in debt from store cards, consider transferring those balances to a card with a lower interest rate. MIDFLORIDA’s Visa Platinum and Visa Signature credit cards have competitive interest rates and a number of perks. Apply online today and start the process of cutting up those store cards!