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Are Retail Cards A Good Decision?

It seems like every time you walk into any store, they have a credit card they want you to apply for. While most of these cards promise a good bonus for the first transaction after being approved, are they really the best thing for you?

Most store cards are limited to being used for instore purchases only which limits their usefulness. This can tend to make you spend more at that store because you do not need to reach into your wallet for physical cash leading to purchases you may not have made otherwise.

Even cards that are branded Mastercard or Visa and can be used at more places are also something to be wary of. These store brand cards tend to carry higher interest rates that can cause more of your monthly payment to be interest only. Store cards with large balances tend to stay around for a longer time period causing any initial savings from opening the account to be repaid over and over again.

One thing to consider when opening a store card is if you have a specific purchase that needs to be made, and you have the funds to pay off the balance in full. If you are able to secure a large discount on an item that you were already going to purchase and pay cash for, then it could be worth it to open that card as long as you payoff the balance in full immediately.