The Truth About Your Store Credit Card
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“Would you like to sign up for the credit card to get 10% off your purchase today?”
If you’ve ever heard a variation of this sentence while buying bread and bananas or a new pair of pants, you may have considered getting a store credit card.
These types of branded cards are offered at almost every big-box store you can think of, often promoted with discounts, “VIP status”, and big signup prizes. But the truth is, they’re almost never a good idea, and they could be doing more damage than you’re aware of.
Let’s talk about the truth behind your store credit card, what you should consider before signing up, and what to think about if you already have one of these in your wallet.
With hundreds of credit cards now available, it’s no surprise that grocery stores and retailers have developed branded credit cards just for their customers. These cards are pushed indiscriminately to customers, at the till, among the aisles, and even at the gas pumps. Blurring the lines between credit card and loyalty program, these cards are increasing in popularity– but what’s really in it for the customer and the store?
For the customers, it’s simple: the cards offer deals, bonuses, and perks that grab your attention.
For the store and the credit card company, the incentives are bountiful:
You should think twice and read the fine print about any card or credit product you’re considering, not just store cards. However, it may be harder to think through your options if you’re being targeted by a quick popup online, in line at a store, or with a grabby promotion.
Here’s the truth behind most store cards:
Ask yourself a couple of questions before applying:
In most instances, the benefits you’d get from a store credit card don’t outweigh the risks and high fees associated with them. Even if you are truly a frequent shopper at a specific store, you’re likely better off doing your research in the world of reputable credit cards, not limiting yourself to a store card.
Even setting aside the issues of fees and penalties, the most important question to ask yourself is this: Do I need this credit card?
If you’ve already signed up for a store card, there’s no reason to panic. Just like other credit cards, responsible management is key. Here are a few quick tips:
If you’re struggling with debt on a store credit card or other high-interest credit card, you may want to consider debt consolidation. Consolidating this type of debt with Parachute could provide you with a lower interest rate and save you money on your monthly payments, but it can also:
Learn more about Parachute today to explore your options.