You get to the front of the department store check out line and the cashier asks you a question. You’ve probably heard it a few times before.
She asks, “Would you like to save 20% on your purchases today?”
You already know where this is heading. They want you to sign up for a store credit card. You’re not even sure if there’s room for another piece of plastic in your wallet – but saving 20% is awfully hard to resist!   So what do you do?
Just like most things in life, there are pros and cons to using a store credit card to make purchases.
The first thing you have to realize is the whole motive behind creating store charge cards in the first place. Here’s a hint – it’s not so you can save 20% on your purchases. It’s so they can make more money off of you.
There are always those pricey items we wish we could afford immediately. But we can’t use our personal checks, so we think it might be a good idea to put it on a store credit card.
Those department stores are simply giving us a way to get what we WANT when we want it. And we want it NOW! The problem is – we can’t afford it. Otherwise our checks would work just fine for shopping.
The interest rate on those store credit cards is almost always around 20% or higher. If you can’t pay off your entire balance each month – any money you saved at the cash register will quickly disappear thanks to that astronomical APR.
Another downside to store credit cards is the low credit limit. The average limit on these cards is usually around one-thousand bucks. That makes it easy to carry a balance close to your limit, which can hurt your credit score.
If you like junk mail and tons of ads in your mail box – sign up for a store credit card. Doing so gives the company free range to send you advertisements and promotions in order to get you to spend even MORE MONEY!
Yes it’s true – you can get some nice deals through store credit cards, and if you’re responsible, they can even improve your credit score. Just remember to always pay off your balance each month.
If you have a tough time controlling your spending – you might want to avoid these potential traps. They’re really nothing more than another temptation to spend money you don’t have as you fall deeper and deeper into debt.
Using personal checks, creating a budget, and keeping track of your spending with a check transaction register is a much more responsible way to pay.
If you like shopping – spending some time shopping for new checks at Check Advantage. We very recently added new personal check designs including Cute Checks, Cool Checks and new Classic Checks.
Image credit: LotusHead
Related posts:
