Unlike presumed by most people, store credit cards are not worth a thought if you want to save your hard earned money. Before you realize, these cards will lead to debts that you will be unable to repay. Though the process of applying and obtaining these cards is easy, the interest rates are extremely high and can be a disaster if you do not pay off the outstanding balance in full each month.
Stores cards are cards that can be used only in certain set of stores across the country. Though they may sound similar to loyalty cards, they are far from that since you can borrow money from store cards. If you are not careful about repaying the borrowed money, be prepared to face high interest rates.
Most consumers sign up for store cards before of the enticing promotional offers. The accessibility to these cards is also relatively easy, but the interest rates on these cards are way too high. The interest rates of most of these cards vary between 25 percent and 30 percent, which are way above most of the credit cards that are available for people with bad credit history or no credit history.
Though retailers don’t run a credit check before issuing their credit cards, it does get reported to the credit bureau and has an impact on your credit score. If you apply and obtain multiple store cards in a short span of time, you are bound to face trouble when applying for a home loan, auto loan or mortgage.
The only way to ensure you reap the benefits of this card without falling prey to debts is by paying off the entire balance in full each month. If this is beyond your repayment means, do not opt sign up for them.