Negative Side of Store Credit Cards

Estimates show that proprietary or private-label credit cards bring in about $100 billion annually. We've all heard the offers. Would you like to save on your purchase today by applying for our credit card? Of course this seems like a great deal, you obviously like this store if you are shopping there, so why wouldn't you do it?

Do not be fooled, these credit cards interest rates are so high, you usually end up paying more in interest then you save they average as the interest rates range from about 15% to 25%. They usually offer special rewards and coupons if you spend a certain amount of money monthly or annually. These rewards are usually in increments to about $25.00, the amount of money required to earn these rewards cost you much more money than the average person should be spending.

The instant savings is usually the only perk to these cards. It is obvious that the rewards these cards offer really aren't very rewarding in the long run. There are some alternatives, some stores offer you credit cards that you can use everywhere and earn rewards towards their stores as you are doing your regular purchasing.

A store credit card does pose a bigger risk to your credit score if you already have a few cards, this additional store credit card makes you look like a risk to credit agencies. However if you do have one, and it appears as an open account but is not used, this could help your credit rating. If you do decide to take the chance and open one of these cards, make sure to read the fine print very carefully, you want to make sure that you know everything they are expecting of you and what to expect from them.

Contributing National Payday Staff Writer

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