By TLB Contributing Financial Writer: Martin
How often have you found people at a store suggesting and trying to convince you to sign up for their store credit card? A lot of department stores and retailers offer the best credit card deals to its customers through proprietary credit cards. These cards not only prove to be a useful long-term purchasing tool, but also provide promotions and amazing chances to save on their merchandise or services, over retail prices.
Store credit cards are offered by department stores and many high-end retailers to make your shopping easier. Usually, such cards are not provided by the store, but by the bank that is affiliated with it. Providing you with the best credit card offers, these cards function as closed-loop cards. That is to say that they will only be used at the store from which they are issued, and not elsewhere for example at a filling station, or a restaurant, etc…
If you consider the promotional offers by a retailers card, then store credit cards are a win-win. Before you choose one, look for the best credit card offers, and this is how you can multiply your savings with everyday purchases.
The main advantage of having a store credit card is to maximize your savings, as well as to get your hands on the best credit card offers. Moreover, they provide a lot of long-term benefits such as:
With a store credit card, you get to enjoy many discounts and promotional offers. A product might cost you a certain amount, but with a store credit card and the percentage of discount that it has to offer, give you a chance of saving money on many purchases.
Since they are not very hard to get, the store credit cards can help you repair your bad credit score (if you have one). Similarly, if you have just started building your credit score, a store credit card can give you an advantage of building your score the correct way.
This is simple. A store credit card will increase your line of credit, which means that even if you make a small purchase, but pay it back in time every month, you will see a massive decrease in your credit utilization ratio.
With advantages come a few disadvantages as well.
Some consumers may feel that instead of providing the best credit card offers, a store credit card charges a high interest that becomes hard to manage in the long run.
Sometimes, the consumers can find themselves trapped in a vicious debt cycle because of non-payments of the store credit cards.
The overall low lines of credit can become troublesome for some consumers over the long haul.
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