The pros and cons of store credit cards

We’ve all approached a register to complete a purchase and been asked if we’d be interested applying for a store credit card. I once took them up on the offer at Old Navy, and unlike Amy Schumer, never shopped there again. There are pros and cons to having a store credit account, so make sure you take a good look before you open an account.

Pro: They are easier to get

Application requirements for store credit cards are generally less strict than regular credit cards, so chances are you’re more likely to get approved. If you’re looking to get a card from a store you often frequent, this should make you happy.

Con: They carry higher interest rates

The average store credit card is 8-10 points higher than regular credit cards. This may not be a big deal if you’re only using the card sparingly, but a few big purchases that aren’t paid off completely by months’ end could come back to haunt you.

Pro: They help you build credit

If you’re young and haven’t had a chance to build any credit, a store credit card could be very helpful. It’s easier to approved for one so you wouldn’t need much or any credit history to qualify. A purchase or two a month will put you down the road to good credit. Just make sure you pay the card off each month.

Con: Their use is limited

Some store credit cards may allow you to use them at sister companies, but for the most part, you’ll only use them in the store that issues them. That might be fine if it’s a store like Target or another retailer that you often visit, but overall it won’t be a very versatile card.

Pro: They provide in-store rewards

A lot of cards will reward the user with discounts and promotions which can provide great value. Free shipping, for instance, is a perk that is appreciated. Just be sure these benefits don’t cause you to overspend.