I got my first credit card when I was 18-years-old, and it has been the only card I've held for the last 14 years. Over the years I've received many credit card offers, and among those have been an alarming number of offers from some of the stores I frequent. I've entertained the idea of opening a store credit card, but I have ultimately decided to pass on each one. Below are three of the reasons keeping me from applying for a store credit card.
I was too young to understand that importance of interest rates when I applied for my first card, so I had to learn the hard way. When my card arrived it came with an interest rate of 19.9%, but I didn't know better than to use it. The only good thing that came from having a rate that high is learning a lesson.
Credit cards aren't exactly known for the low interest rates, but store credit cards are notorious for having some of the highest rates around. In the last few months I have seen store cards with interest rates ranging from 14% to 18%. There is no way I would willingly sign up for another card with an extremely high rate.
I didn't choose my first credit card based on how I could use it, but now it's only used in case of an emergency. Having a card that is accepted nearly anywhere I need to shop really comes in handy when money is tight. However, the majority of store cards can only be used at the store that issued them. For me and my family it just doesn't make sense to have a card that can only be used at one place.
Canceling a card can hurt your credit
After having my credit ruined by identity theft, I spent many years trying to understand what can and can't hurt my credit score. The one thing was made clear is that lowering the amount of money I have available will hurt my credit score. Although most store credit cards can only be used at the issuing store, the credit line still counts toward available funds. That means if I get a card from a store I have to keep it active even if I never intend to use it, or risk taking a hit to my credit score.
I've considered all the pros and cons, and have decided store credit cards just aren't for me or my family.
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