• Google Buzz

When I was in high-school, I hadn’t quite figured everything with money, and who had. When I bought clothes, I went down to Maurice’s, which was where all of the “cool kids” shopped for clothing. I went down there and would quite often buy $20 shirts, $40 hoodies, and $30 pants. What was I thinking? Whenever I bought something, they would always ask me if I was interested in a store credit card, after all, I could get 10% off right then and there! I knew that it was probably a bad idea at the time, but I wasn’t entirely sure why, so I just paid with my credit card then (back when I had one), and left it at that. Since then, I’ve gotten rid of my credit card and do most of my shopping at Wal-Mart and Target. Here are several reasons that you should never get a store credit card.

The Terms – Store credit cards often have some of the worst interest rates and terms when it comes to credit cards. They sucker you in with the 10% off rate and have to make up for it some how. They do this by giving you some very bad terms on your card, usually more than a 20% interest rate. The national average is around 12% or 13%! Some of the worse store credit cards go all the way up to 28%! It just doesn’t make sense to save the 10% the first time, only to give them 28% for as long as you us the credit card.

Personal Behavior – Let’s face it, most people don’t pay their cards off every month. You’ll rationalize that you’ll pay off the balance as soon as the bill arrives, but more often than not, that just doesn’t happen for whatever reason. This is why they can get away with giving out that 10% discount. They know that statistically most of the cardholders won’t pay off their balance in full each month. A small percentage might be beating the system, taking the discount and paying their bills of every month, but this is surely a slim minority.

Credit Score – A percentage of your score is based on your applications for new credit. When you sign up for a store credit card, the company will perform a “hard credit pull” meaning that your score will temporarily drop for the next six months or so. In addition, if you happen to go over the very low limit that usually comes with store credit cards, your “pays as agreed” status on your credit report could go away quite quickly.

Late Fees – A recent study from R.K. Hammer Investment Bankers stated that 35 percent of the income that credit card companies make comes from late fees. This is a $50 billion dollar a year industry, they are making some serious money on late fees. You might think that you’re going to pay your bills on time, because statistically that’s not the case. You’ll get dinged $30 for a late fee charge and a hit on your credit score.

Sponsored Link: Looking for a credit card? Besure to compare you’re options first. CreditorWeb.com offers full reviewsand ratings for student credit cards as well as other types.



 Related Content: