In the olden days, credit cards were given only by certain number of banks and financial institutions. But today, you can obtain credit cards from practically any place, and one of them is the store credit cards, which have seen a massive rise. These cards may look attractive, especially if they are given by the shop where you shop regularly. But there can be some disadvantages of these cards too. Here is some information about the store cards, if you are looking out for one.
What are store cards?
Store cards are similar to credit cards, in that you get a credit limit up to which you can spend on the card. But store cards can be normally used in certain store or group of stores that give you the card. To summarize, you get credit to shop at a certain store or various associated stores by using their special credit card.
What are the advantages?
To attract people to use a card restricted to one store, the retailer will give you a lot of discounts or special offers. They can consist of a free gift, or discounts on purchase prices when you use the card. If you frequently shop at the store, then you can save on the necessary items, when you use one of these cards. Another advantage of store cards is that you can easily get one, even though your credit rating is poor. You can use the store card to your advantage to build your credit history.
Are there any disadvantages?
Though store cards have some benefits, they can be costly type of credit. Many store cards carry interest rates of 25-30% APR that is much more than the normal rates for credit cards. This means unless you repay the balance entirely every month, you will be in debts costing you a lot of interest. Besides, most store cards are very restrictive, since you can only use them in the certain stores. So unless you shop in a store frequently, then a store card is not worth it.
Can it be used as a credit card?
Though many store cards are restricted for usage in particular set of stores, some store cards can be converted to full credit cards. Then these cards can be used in other places, just like a normal credit card. However, the interest rate mostly remains same, meaning you are paying much more than normal to enjoy your credit facilities.
Should you go for it?
Though store cards are very expensive and are not worth it for many, you can use them to your advantage if you use it properly. If you have problems getting a regular card, then with a store card, you can build your credit history. Besides if you prefer shopping in a particular shop, then getting a store card and paying off the entire balance every month will let you enjoy the benefits of a store card without paying any
interests.