Store Credit Card – How Does it Work?

Store Credit Card, how does it work? Store credit cards first were designed for department stores. But now you can get them from home improvement stores and chain stores such as Target. However, with a store credit card, you are offered an additional ten percent off the purchase price each time you use the store’s card.

Store Credit Card

How Does Store Credit Card Work?

Store Credit Card Work just like normal credit cards. You make purchases on the card that you can pay off over time. Every month you’ll have to make your normal minimum payment. The interest rate on the store cards might be higher than you would have on a normal credit card. A lot of stores will offer discounts to you if you use the card to make purchases. Incentives such as additional money off your next purchase.

However, many store credit card is offered by banks through the store. For example, Synchrony Bank and ExxonMobilSmart Card. It is necessary to carefully read the Credit card agreement to know which bank is issuing the card and how to make payments on time. You may be able to apply for a Store Credit Card both in the store and online. Be sure to review the interest rates as well as fees and penalties.

Advantages of Store Cards

Note that, the store would not offer a ten percent discount if it was not to their advantage. The average interest rate on a Store Card is about twenty percent. Suppose you purchase the item and then do not pay off the balance in its entirety. The store is going to make back discounts and then some over the time it takes to pay off the card.

A Store Card may be easier to qualify for, which means it may be a good option for building your credit score or history. If you want to improve your credit card score, you have to keep the balance low and endeavor to pay your monthly payments promptly. If possible pay off the Credit card bill in full every month.

Disadvantages of Store Cards?

  • A Store card might look easy to handle but its disadvantages are bad. If you’re not disciplined pay off the card bill in its entirety each month. Some people will make charges and get straight to the counter to off their balance in full. This option is good for self-discipline. If you’re not a disciplined person always watch out for the due date of payment.
  • A lot of people spend more money on the sale or on getting a discount when they are putting a purchase on a credit card. They spend more than their budget on a particular purchase.

Remember, a credit card is a tool and if you do not use it wisely, you may lose all the advantages of having one. The ten percent you save or rewards earn is not worth the interest you are paying if not paid on time.

Avoid Using Store Credit Cards

It is better to avoid a Store Card it’s a trap, and make payments with cash when in a store. If you want to save money, shop the sales, and use coupons when you can. Be careful about your spending and what you’re buying.

A store Credit Card is treated the same way a normal card. If you’re carrying a balance on any credit cards, you should set up a debt plan. A budget is another important tool to help you get control of your finances.

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