Pros and Cons of a Store Credit Card

Utilizing a store card is something that many consumers choose to do. This type of credit card presents you with some advantages, but you will need to consider a few disadvantages as well. Here are some of the pros and cons of using a store credit card.


One of the biggest advantages of holding a store credit card is the discounts. Many retailers will provide discounts to store credit card holders on a regular basis. Many times, this is used as a technique to try to get you to sign up for the card in the first place. The store will ask you if you have a store card and then notify you that you will receive a substantial discount if you sign up for one. Sometimes, the discount can be substantial. Many retailers will offer discounts of as much as 50 percent to store credit card holders on certain occasions. 

Another advantage of using a store credit card is that you can free up other credit lines. If you are one of those people that regularly makes purchases on credit cards, it is easy to clog up your credit line with retail store purchases. With a store card, you will be able to separate your purchases and keep your credit lines free. When you need to make a big purchase, this can come in very handy.

Another reason that many people use store credit cards is for the perks that come with them. Many store credit cards will provide you with some type of reward points whenever you make a purchase. These rewards can be used in much the same way as traditional credit card rewards. You will be able to use these points on many different things such as free merchandise or gift certificates.


Although you can save some money on discounts with a store credit card, you are likely to give the discounts back in interest charges. Most store credit cards carry with them very high interest rates on purchases. If you do not pay off your balance at the end of each month, you could incur some very large interest charges. It is not uncommon for retail cards to have APRs of more than 20. If you end up spending too much on your card, this could put you in a large financial hole that is difficult to get out of.

Another problem with these cards is that they tend to have low spending limits. While this might be considered a good thing for some, it is a problem for others. If you have a larger income, you may want to spend more money on retail goods. When you want to make a large purchase, it can be bothersome if you have only a small credit line to work with. When this happens, you will have to put part of your purchase on a different card or cover the difference with cash.

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