If you frequently shop at Macy’s, Kohl’s, or JCPenney than you may be interested in getting one of their credit cards. Customers that are department store credit cardholders get special deals, discounts, and perks for making purchases with their store card. But do these credit cards help or hinder your credit profile? Here a list of the pros and cons of using a department store credit card.
- Amazing Discounts and Perks
A lot of cards offer amazing perks such as 25% to 50% discounts, free gift wrapping, and $25 gift cards. In addition, many department store credit cards offer 1% to 3% cashback and points you can use toward round-trip airline tickets.
- Helps Build Credit History
Department store card issuers are often more lenient when it comes to approving customers for cards. Therefore, those looking to build or reestablish their credit history should definitely apply for one or more department store credit cards.
- Low Limits
Often department store credit cards have low spending limits in mid hundreds to low thousands range. This can make it easy for customers to max out, but it can also make it easier to pay off. If you’re not looking for a credit, you should pay off monthly than a department store credit card may not be the right fix for you. But if monthly payoffs sounds feasible than store cards can greatly help your credit score.
- High-Interest Rates
One major drawback of department store credit cards are they usually have significantly high-interest rates. It is not uncommon to see department store credit cards with APRs as high as 20% or more. It is important to keep this in mind when choosing a department store card because if the card offers significant savings on your purchases it offsets the cost of the high APR. High APRs are another reason retail store card holders should follow the best practice of paying cards off monthly.
If used right then department credit cards can have a positive effect on your credit score and save you money in the process.