If you’re like many people, there’s a business or several where you shop regularly. Maybe it’s a big box store, your local grocer or a fashion retailer. Because of how much money you spend there, it may seem smart to get a store credit card for promotions and savings. However, there are several things to consider before opening a store card. Here are three things to ask yourself before signing up for that new line of credit.

Will you pay off the full balance each month?

It’s usually easy to get approved for a store credit card, and many cashiers entice you with a discount just for signing up. These sign-up perks can be nice, but you should think twice about opening the card if you can’t pay off your statement balance in full each month. This is because most store cards have very high interest rates. In fact, as of October 6, 2021, the average store credit card interest rate was 24%. So, if you only pay off the minimum, you could end up paying a lot more in the long run on interest charges.

Do you understand any interest promotions?

Many store cards have zero-interest and deferred-interest programs for new account holders. It’s important to know the difference between the two as they can have very different outcomes.

Zero-interest programs will charge no interest on your balance for a set amount of time, and then interest will start being charged on whatever balance remains after the promotional period ends.

Deferred-interest programs, however, will charge you interest on the balance dating back to the purchase dates. Some such programs promise to waive the interest if you pay off your balance in full before the promotional period ends, but if you can’t make that happen, you could be on the hook for all that deferred interest.

Can you follow good credit practices?

A store credit card, like any credit card, can either hurt or help your credit scores. To keep your credit scores healthy, make all your payments on time, don’t carry large balances proportional to your credit limits (the totals across all your cards) and avoid frequently opening new cards. Late payments are particularly detrimental as they can affect your credit scores for seven years, so it is important to pay at least the minimum amounts on time.

Good credit is essential when applying for a home or car loan, so you’ll want to stay focused on building and maintaining strong credit scores.


In closing, even when a store credit card promotion seems appealing, make sure you know exactly what you are signing up for so you can get all the expected benefits without any unexpected costs.