Important Facts About In-Store Credit Applications

Credit card offers are a standard part of retail store policy. A day of shopping typically will yield two to three requests to apply for an in-store credit card. Before you apply for a credit card because of the cashier’s offer, you need to make sure you understand the pros and cons of in-store credit cards.

These cards typically come with a percentage off deal. One of the most common credit card offers for in-store cards is to offer you 10 percent off the day’s purchase. Some cards also promise coupons and other special deals if you apply for a credit card while you are in the store. Some stores even have free giveaways, such as t-shirts, coffee mugs, and other items for your use. These cards do usually come with monthly or quarterly coupons for use by store credit card holders only, and some stores even have special sales nights when only in-store credit accounts are accepted.

Beware of all in-store credit card applications, however. The credit card rates for these accounts are typically on the higher end. With decent credit, most consumers can get a card with no higher than 10 percent interest, but the credit card rates for in-store cards, even for consumers with excellent credit, tend to be closer to the 20 to 30 percent range. For consumers who will get the card simply for the benefits, the interest rate doesn’t matter, but for others, the cost of the card isn’t worth the benefits you get when you apply for a credit card.

The credit card offers that come with in-store cards also can be rife with loopholes. For example, the cardholder may find that the discounts apply only if the consumer carries a balance from month to month. That means that people who want to get the card, but pay it off monthly, will not receive the benefits the credit card offers promise. Other cards have benefits only for certain customers or at inconvenient times.

In general, in-store credit can be an excellent way to boost your credit score if you have had credit problems in the past. It also can be a way to track charges at a store where you shop often. Do-it-yourselfers, for instance, may find it helpful to have an in-store card for a home improvement store to keep up with charges. The danger of in-store credit, however, comes in charging too much on a card with high interest rates.

While you should look around at the credit card offers for stores you frequent, make sure you review them with an eye for detail to avoid any unexpected surprises.