The issue with store credit cards

Indianapolis, Indiana – The season of holiday shopping is rapidly approaching. “Would you like to open a store credit card?” will undoubtedly be asked repeatedly to you at checkout amid all the hustle and bustle. Think twice before you sign on the dotted line, advises Consumer Reports.

Everybody has been there. You’re informed that if you open a store-branded credit card immediately, you can save even more, often up to 20% off your purchase, before you swipe your credit card to pay. Is it time to jump in?

This is often a bad idea. Yes, those initial savings can be very alluring, but you’ll incur high interest if you don’t pay off the balance before the promotional period expires.

The interest rate on retail or cobranded credit cards is at an all-time high of 30%, while the average credit card interest rate is about 20%. Some are considerably higher than that.

Nearly 35% of credit cards come from TJX, JCPenney, QVC, and Walgreens; nearly 36% come from Burlington, Big Lots, and Michael. The majority of Americans maintain a balance from month to month, which might affect your credit score in addition to requiring you to pay extra.

So, is there ever a legitimate reason to think about applying for a shop credit card?

if you frequently shop there and make sure to pay off your debt each month or before a deal expires. Just be mindful that a heavy day of shopping for holiday gifts could exceed out the credit limit on many store-branded credit cards, which often have low credit limits.

It’s also worth noting that store-branded credit cards can occasionally be obtained more easily than regular credit cards. These might be a decent choice if you’re seeking to establish credit, provided you promise to maintain a low or nonexistent balance.