Do you like shopping? If your answer is yes, you should look into getting a credit card for your favorite brands. However, getting a store credit card can come with some advantages and disadvantages. There are many things that comes with getting a card for a retailer you shop at quite often. In this review, I will go over what you’re able to get out of purchasing a store brand card and what it’ll cost you. You’ll be able to receive different rewards programs and offers depending on which card you get. Even if you have a low credit score, you’ll still be able to apply for a store credit card.
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Advantages to Purchasing a Store Credit Card
There are lots of pros that comes with buying a retailer brand credit card. One of those positives is receiving a welcome bonus when you sign up. Most cards will come with a sign up bonus offer that’ll give you discounts on products from them depending on the size of your purchase.Even if you have a low credit score, you’ll still be able to apply for a store credit card. Plus, owning a store card will help you rebuild your credit if you use them wisely. You’ll be able to pay for the balance as much as you can each month to stay away from an interest fee. Remember, you must pay your bills on time or you may be charged with additional fees.
With a store brand card, you’ll be able to almost buy anything you want from that retailer. Like a normal credit card, you’ll be able to put your transactions onto this card and pay it off when you have the money. Just as long as you take care of your credit card, it will be beneficial for you to increase your credit as well. Another perk from a retailer card is that most will reward their customers for their loyalty. There are some cards that will offer you an ever going discount, bonuses, and rewards when you use their card.
Some stores will give you interest-free financing for a new card member. In other words, the bigger the transactions are better if you pay your balance off while the promotion is still going on. Lots of other retailers will give their shoppers finance plans that comes with no interest for their balances if completely paid for. As long as you pay within the 6, 12, 18, or 24 month period it will still be valid.
Disadvantages of a Store Credit Card
While store branded cards come with lots of perks, there is a downside to these credit cards as well. Even if one of the perks is increasing your credit score, it can also decrease your credit. The three major credit bureaus will look into your credit utilities and see how much credit you have available. When they do this, they’re comparing it to your overall debt combined to see your creditworthiness. If you use a big percent of your credit, it will have an effect on the ratio they look at and can reduce your credit.
Even while your credit score isn’t that great, you’re still able to sign up to get a store credit card. However, this doesn’t stop them from running a credit check on your account. In other words, the major credit bureaus mentioned above will be alerted when you attempt to open a new line. It’s more well known as a hard inquiry, which will appear onto your credit report. A hard pull will damage your credit even more unlike a soft pull which doesn’t effect your credit at all. Normal customers will loose about 5 points on their score just for turning the form in. If your score is already pretty low, think this through before signing up.
Just as it can give you lots of discounts on retailer products, it comes with bigger interest rates. Most cards typically come with a higher interest rate when you compare it to your traditional credit card. Keep this in mind while you use your card, or the interest can drain a good amount of money out of you. If you have a big balance on your account for a long time, it can cause you to pay a more expensive price than the original. This kind of defeats the purpose of owning a store credit card. However, if you don’t pay your whole balance each month, you’ll end up paying at least 25% more than the interest fees you’re already receiving.
Best Retailer Brand Credit Cards
If you’re looking for a great store brand card, look no further, here are some amazing card options provided below.
A great option is the Target RedCard, it will offer you a good APR rate and comes with no annual fees. Plus, there are lots of rewards and perks that comes with this card such as a 5% discount for your transactions at Target. You can even receive 30 extra days over their normal return policy to return products from Target. There’s free shipping and the discount is qualified for majority items in the store.
Another amazing choice is the Amazon.com store card. This card will come with excellent benefits and no annual fee as well. Plus, if you purchase this card, they will upload a $10 Amazon.com visa gift card onto your account! If you shop on Amazon quite often, this is an amazing choice to look into.
Finally, the Best Buy Credit Card for electronics and other store goods. It comes with a great welcome bonus offer, no annual fees, and the card gives you a discount for lots of products they carry. This is an excellent choice if you love looking for the latest advanced or slightly used electronics rather if it’s a camera to a TV.
Conclusion
Getting a store brand credit card can be a dicey move. It comes with many perks and benefits that most definitely seem appealing. However, there is a good amount of disadvantages to signing up with one as well. Depending on your credit score, I would recommend getting a store card if you’re a loyal shopper for that brand and if your score is in good standing. Even then, your credit can still be at risk of decreasing even if your score is good.
