Store credit: Not always a bad idea

This post comes from Beverly Blair Harzog at partner site Credit.com.

When people ask me about store credit cards, I usually say there are better choices for a credit card. The reason? High interest rates. The May issue of Consumer Reports Money Adviser compared 15 store credit cards and also concluded that the downside is the high interest rates.

But, as with everything in life, there are exceptions. If you get a retail card from a store where you shop frequently and use the card correctly, you can actually benefit from the rewards.

Don't confuse store debit cards with credit cards

First, you want to make sure you know what type of card you're applying for. The vast array of store card choices can be confusing. Some stores offer both debit cards and credit cards. Target, for instance, is well-known for its debit card, which is linked to a checking account. But Target also offers several credit cards.

And some stores, such as Lowe's, offer a credit card that's designed to help you make an expensive purchase. So just be sure you know what you're applying for. Read all the disclosure statements (yes, the mouse print) so you're clear about the type of card you're getting. (Post continues below.)

Don't say yes in the checkout line

I was buying a blouse at Macy's a few weeks ago, and the lady at the checkout area would not stop hawking the Macy's credit card. I think the employees must have had a contest going on that day! I firmly said no thanks and paid with a credit card that gives me miles.

You sometimes get a hard sell in the checkout line. Resist the urge to open an account on the spot. The store will offer you all kinds of discounts if you open the account right then and there. Say "No, thanks!" But ask for the application if you shop at that store frequently and you're interested in a card.

Take it home and sit in a comfortable chair with very good lighting. Read the rewards program details and look over the costs of the card. This gives you time to make a rational decision when you're not being enticed with 10% off.

Pay off the balance every single month

You have to make a promise to yourself and stick with it. Store cards have high interest rates, so there's no point in getting a card for the rewards and perks if you pay interest on your purchases. If there's even the slightest chance you'll be carrying a balance, then don't get a store card.

Look, stuff happens in life. None of us can see the future and claim that we'll never, ever carry a balance. But if your past behavior suggests you might have a problem paying off the balance every month, then it's best to say no to a store card.

Choose a card that matches your shopping needs

While it's important to compare cards, I think it's more important to get the card that matches your shopping patterns. Kohl's has a lower APR than Macy's card does, but if you really prefer to shop at Macy's, you won't be able to maximize rewards with a Kohl's card. See what I mean? As long as you don't carry a balance, don't worry too much about slight differences in the APR.

Also remember that rewards programs vary widely. Sometimes there are terrific rewards, but you need to be aware of caps or thresholds. For instance, the True Earnings Card from Costco and American Express gives you 3% cash back on gas purchases on the first $3,000. After that, you get only 1% cash back. That's still good, but it's not as great as 3%.

Other cards might offer rewards plus a sign-up bonus. With the Amazon Rewards Visa Card from Chase, you get a $30 Amazon.com gift card that's loaded into your Amazon.com account as soon as you're approved. Plus, you get a pretty generous rewards program, starting with three points for every dollar spent on Amazon.com.

So pay attention to the details when you're choosing a store card. You want to be sure you can really benefit from it in the long run.

For some, it can help build credit

Aside from the rewards, store cards can be a good choice for new grads with limited credit history or for someone who's trying to rebuild a bruised credit score. Store cards are a little easier to get than the traditional credit cards from the big banks.

• Smart Spending on the go: Get our app for Android or iPhone

But whatever you do, don't go on a frenzy and apply for a bunch of store credit cards at once. Trying to open several accounts at one time could have a negative impact on your credit score. Focus on one card, pay the balance off every month, and take advantage of the rewards. If you do that, these cards can have a positive impact on your credit history as well as your wallet.

If your credit is so bad you can't get approved for a store card, check out secured credit cards. If you use a secured credit card responsibly, you can work your way up to a store credit card or even an unsecured credit card from one of the big banks.

More from Credit.com and MSN Money:

• The best cash rewards credit card in America
• What's really in your credit report?
• Confessions of a former credit card-a-holic
•  How store credit cards trap you
• Why I opened a store credit card