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Store credit cards
Department Store Credit Cards:
A Guide

It seems that whatever store you go into nowadays, they ask you at the till whether you would like to open a store credit card on the spot. The question is always asked along with the comment that you could get 10% or sometimes even 20% off your first purchase – if only you apply today.

It’s small wonder that so many people end up opening a department store credit card. But are they really as good as they sound, or are there pitfalls to avoid if you do succumb to temptation?

How are store cards different?

In truth, there isn’t much difference between a normal credit card and a department store credit card. The principle is pretty much the same; the only big difference is that a store credit card is tied to a particular shop and cannot be used elsewhere, whereas a standard credit card can be used anywhere you wish.

What are the benefits of having a department store credit card?

If you often shop at a certain store, then getting its store credit card can be an advantage for you. In order to tempt customers to sign up for one, large stores often give out coupons, discounts, and other benefits to make joining worthwhile, and to gloss over the downsides of signing up for such a card.

You may also find you start receiving invitations to preview the latest arrivals in store before everyone else gets to see them. You don’t need to spend anything on your store credit card to get into these events, but it does give you a golden opportunity to do some Christmas shopping before all the crowds are allowed in!

Make sure you make the most of having a department store credit card by scanning any free magazines they send you for coupons or special offers. It’s often worth applying for a card simply to take advantage of all the benefits. The card can simply sit in a drawer if you don’t want to actually use it.

What are the disadvantages of having a store credit card?

While it might seem like a good decision to treat yourself to some shopping from a certain store and pay for it using your store credit card, you can come seriously unstuck if you can’t pay for it all when the bill finally arrives.

A department store credit card will usually charge far more in interest than a standard credit card, so if you know you won’t be able to pay for your goods in full when your statement arrives, don’t buy them in the first place. Deciding that you will worry about it later is not a good move.

Is a department store credit card right for you?

If you are disciplined enough to know that you can take advantage of all the perks that a department store credit card offers you, without running up debts on it and having to pay a high rate of interest, then you would benefit from getting a store credit card with a shop that you visit often.

If you don’t trust yourself with having a nice credit limit for a store you love, however, then it’s probably best to carry on as you are. Nothing is worth getting yourself into debt, and as a department store credit card generally charges more interest than a normal one, you would be better safe than sorry. Otherwise, your bargain won’t end up being a bargain at all.

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