Old Navy, Sephora, and Victoria’s Secret are just three examples of popular retailers who may hold a special place in your wallet. Retail credit cards are offered by brand-name retailers and are designed to encourage you to spend more money at the retailer in question. Usually, they offer incentives for using the card in-store or online, knocking a few dollars off the total at the cash register. Yet, as with any other credit card, store cards have advantages and disadvantages. Here are a few things to be aware of if you choose to open a store credit account.
The Advantages of Retail Credit Cards
• Store credit cards can sometimes be easier to acquire, if you don’t have great credit and often get turned down for traditional credit cards.
• If you use it correctly, and pay off your entire balance each month, your store card can help you build credit – just like any other credit card.
• As we mentioned earlier, store cards usually offer discounts for shoppers. If you shop at one retailer enough, these benefits could save you a lot of money in the long run.
The Disadvantages of Retail Credit Cards
• Like other credit cards, retail cards encourage unnecessary spending. You might find it hard to limit shopping when you can take advantage of discounts now and pay down your balance later.
• Most retail credit cards can’t be used just anywhere – you can only put it to use at the store it is affiliated with. Holding a traditional credit card is often more useful for customers.
• New members often receive a low credit limit that extends up to $500.00. Because your limit is low, one or two purchases can result in high credit utilization, which can lower your credit score.
The Bottom Line
If you frequent a particular retailer enough to warrant a credit card account, and you’re committed to paying off your balances every month, holding a retail credit card probably isn’t a bad idea. As with other credit cards, it’s recommended that you use your card as little as possible and pay off your purchases with every billing cycle. Otherwise, you could hurt your credit score and tarnish your financial reputation.
Waterford Park Apartments in Converse, Texas is committed to making sure that our residents can live their best life! By taking advantage of our tips & tricks, we hope that you can easily maintain—and even improve— your normal routine.