Should you apply for a store credit card?
The cashier is offering you 20% off for signing up. Is it worth it?
With holiday shopping season soon in full swing, you're likely to encounter an offer like this: Sign up for our store credit card and receive a 15% to 30% discount on today's purchases.
Should you jump on it?
That's the question I recently got from a reader:
Lately I've received tempting offers on credit cards. One such was from Sam's Club. At the time of our family's last visit, we were offered to save $40 on that day's purchase if we signed up for a Sam's card. My wife received a similar offer, although I can't remember from where. Of course we signed up for the Sam's card and immediately paid the balance and closed the card. Our question is, how does this procedure affect our credit score? If these offers continue in our favor, is it a good idea to accept? -- Conley family
The answer to your question, Conley family, is it sounds as if signing up for that offer was a good deal for you. But that doesn't make it the right answer for everyone. Whether you should sign up for a store's credit card in order to get a one-time discount depends on both who you are and your current circumstances.
Here are three reasons why you shouldn't take advantage of store credit card offers, and three you should.
- Temptation to spend money you may not have.
- Hassle if your wallet gets stolen.
- Odds of an increasing inflow of junk mail.
- Chances of having your identity stolen.
In short, why do anything to make your already complicated life more stressful?
But do keep in mind that applying for new credit or too much credit will likely have a negative impact on your credit score. So pick your deals -- don't try to set the record for most cards applied for.
You want the card anyway. It's ironic that the same person who may get turned down by one credit card company might get paid for accepting plastic from another. If you're trying to build or rebuild your credit, here's an opportunity to establish a new credit line and save a little money in the process.
You might also be a frequent shopper at that store and get other perks for being a "preferred customer."
Just be sure you're buying only what you came in for and nothing else.
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