Why You Should Probably Decline Store Credit Card Offers at Checkout

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  • Store credit cards can be tempting if you're loyal to one store or brand.
  • However, store credit cards often have minimal perks and few rewards, and the rewards programs are not flexible.
  • Find out some of the drawbacks of store credit cards.

Is a store credit card the right choice for you? Find out.

How often have you been asked if you want to get a store credit card while in the checkout line? Retail staff are trained to ask this question, so it's become a regular part of the checkout process. If you get asked this question, you should think before agreeing to apply for one because a store credit card may not be the best card choice. Keep reading to find out what you need to know about store credit cards.

The difference between store cards and regular cards

Many of your favorite retailers promote store-branded cards. These cards are heavily marketed as a way for shoppers to earn rewards while shopping at their favorite stores.

However, there are notable differences between store cards and regular credit cards.

  • Many store credit cards are closed-loop cards that can only be used with one specific retailer or other associated brands. If you get a closed-loop retail credit card, you can't also use that card to pay for gas or get dinner.
  • Most store cards have minimal redemption options. If you want to choose how you redeem your rewards, a store credit card probably isn't for you.

These are the two biggest reasons it might not be the best idea to sign up for a store credit card. Below are a few other reasons why you may want to decline a store credit card offer.

Store cards earn minimal rewards

Store credit cards usually earn minimal rewards. Even if you spend a lot of money with your card, the card's rewards rate may not make the rewards worthwhile. You may end up doing a lot of spending and not a lot of earning.

Other rewards cards may have higher rewards earning rates -- plus, most rewards cards allow you to earn rewards in multiple spending categories.

Low credit limits

Store cards often have low credit limits. Your credit limit is how much you can charge to your card.

Many factors make up your credit score. How much of your available credit you use or your credit utilization is one significant factor. Your credit utilization makes up 30% of your FICO® Score. Because of this, it's best to have a lower credit utilization.

If you have a low credit limit on a store card, it'll be easier to use more of your available credit. That could negatively impact your credit score.

Store credit card discounts are often one-time offers

Many retailers promote a store discount as a new cardmember welcome offer. However, most store credit cards only offer a one-time store discount.

So while you may save 10% on your first purchase when you sign up for the store-branded card, you will likely not continue to get a discount (or as much of a discount) on future purchases. Keep this in mind when considering a store card.

Little to no card benefits

Unlike other rewards credit cards, a store credit card won't have a lot of features or benefits. It may have no benefits besides earning a low rewards rate on store spending.

Other rewards cards may include perks like purchase protection, extended warranty protection, and trip cancellation insurance. A card with more perks can provide more value.

Higher-than-average interest rates

Many store cards also have higher-than-average interest rates. Interest charges can get expensive if you don't pay your card balance in full every month. You can likely get a different credit card with a lower interest rate.

Paying interest charges is never a good idea. If you plan to carry a card balance to give yourself time to pay off a larger purchase, you can apply for a 0% APR credit card.

You should take your time to review credit card options

The worst time to sign up for a credit card is when you're about to pay for your purchase and walk out the door.

You want to make sure you're making the right choice for your financial situation and goals. It's better to consider card options and carefully review card details first. It's almost impossible to do that in the checkout line.

Store credit cards aren't the only option

Are store credit cards worth it? For some shoppers, it may make sense to get a store card from a favorite retailer. But they're not the right card for everyone.

Don't rush to get a store credit card, and don't feel pressured to say yes when asked if you want to apply for one.

There are plenty of other credit cards that offer more flexible, varied rewards. Check out our best rewards credit cards list if you're ready to get a new credit card.

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