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Store credit cards may seem like a small issue in the big world of credit cards and debt, but unfortunately these ubiquitous cards are often the cause of major credit trouble. Thanks to exorbitant interest rates and an easy application process, store credit cards can do major damage to unwary consumers' credit scores.

However, it is possible to avoid high charges and lengthy repayments, and even beat the stores at their own game. Read on for a look at store credit cards and what to watch out for when using this often-overlooked form of credit.

What is a store card?

A store card is simply a credit card that can be used only in a specific store or store group. Do not confuse store cards with loyalty cards, which allow you to collect points when you spend in a particular store. Unlike loyalty cards, store cards allow you rack up charges. And if you are not careful, those charges will saddle you with high interest debt.

What's the problem with store cards?

In a nutshell, these cards are incredibly easy to obtain, and they entice customers with the promise of great deals and discounts. In reality, however, many people who sign up end up paying horrendous interest rates on the purchases they have made. James Daley, editor of of the website Which? Money, said of store cards: "While the interest rates are unnecessarily high, the real problem is the accessibility of store cards. You can sign up for a store card at the checkout and start spending there and then."

Here are some of the dangers such easy-to-get store credit can cause:

  • Exorbitant rates: Most department store cards on the market charge more than 25% interest, with some at nearly 30%. These rates are much higher than for a standard credit card.
  • Credit history problems: Retailers often don't check your credit rating before issuing you a card. This may sound great in theory, but it allows cardholders to get into debt they cannot afford. (Know your credit scores? Get a quick estimate at MSN Money.) Further, when you apply for a store card, a search is added to your credit file. If you apply for several cards in a short time, your credit score will drop significantly, making it harder for you to get other forms of credit.
  • Low income traps: For many people, store cards are the only credit card available to them. Thus, those without suitable income often find themselves using store cards without understanding how to manage them, racking up heavy debts in the process.
  • Blind loyalty: The irony of store cards is that they give the store a guarantee that you will spend your money there, yet the issuers charge you more than even a regular credit card to do it. You should always shop around and be loyal to a store only if its products are the best values.

Can we beat them at their own game?

The No. 1 rule is not to go anywhere near store cards unless you are absolutely certain you will pay off the balance in full each month.

  • Grab the initial discount offers: Many stores offer a discount for signing up for their card -- such as 20% off the first time you spend on it. Don't blow this discount on a small purchase. Sit tight until there's something in the store you need to buy that's that bit more expensive, thus maximizing the offer.
  • Enjoy the membership benefits: Many store cards have special "store card holder" evenings and offers, a bit like a membership club. There's nothing wrong with keeping a store card just for this.
  • Make it quick: Store cards don't pose a problem if you pay off the balance within the interest-free period. If you do have a balance sitting on a store card, consider transferring the balance to a credit card with a 0% introductory rate, allowing you to pay down your debt faster. And never use store cards for purchases that require long-term payments. If you do, debt problems can soon overtake the discounts or sale prices that enticed you to sign up.

This article was reported by Rachel Brown for Investopedia.