Answer these 5 questions before you open that new store credit card. The holidays are here, and everywhere you shop you’ll probably hear one thing: would you like to open up a store credit card today? Beware of making an impulse decision at checkout, because now more than ever, you’ll be hit with an onslaught of card offers, promotions and limited-time offers. But is it really worth it to open that store credit card? We’ve broken down 5 things to think about before you say yes to that store credit card.  

Should You Open That Store Credit Card?

December 5, 2016

Answer these 5 questions before you open that new store credit card.

The holidays are here, and everywhere you shop you’ll probably hear one thing: would you like to open up a store credit card today? Beware of making an impulse decision at checkout, because now more than ever, you’ll be hit with an onslaught of card offers, promotions and limited-time offers. But is it really worth it to open that store credit card? We’ve broken down 5 things to think about before you say yes to that store credit card.


How often do you shop there?


If you shop at a specific store often, getting the store card may not be such a bad idea. But if it is a store you stop in only a few times a year, signing up for the card may not be a smart move. Try to think about your spending in the past year; have you spent enough at the store to make it worthwhile to open the card? Look at their benefits and use a tool like FinanceWorks to track your previous spending to see if you would really benefit from opening the card. 


Is there an annual fee?


Does the card have an annual fee? Unless the perks greatly outweigh the annual fee, you’ll probably just waste money opening the card. Don’t kid yourself into thinking you’ll make it worth it; really think about how you spend your money currently and if the perks of the card would save you money instead of cost you. This is especially true for airline cards that might offer free checked bags but have an annual fee. If you don’t regularly travel enough to make opening the card break even or save you money, you probably want to pass.


What’s your credit score?


See what factors into your FICO credit score and how you can raise it with these simple steps.

Be smart any time you consider opening any additional credit cards. Think about how much credit you have available and what your credit score is. If you’re still working on building your credit, opening another card may negatively impact your score. Take all of these tips into consideration before you say yes to another card in your wallet. If you have trouble keeping track of various payments and due dates, don’t make it harder on yourself by adding an additional card to the mix.


Have you checked the credit card reviews?


When opening a store credit card, you might consider checking the reviews for the card online before signing on the dotted line. Some store cards have notoriously bad customer service or have a problematic payment system. Check out reviews to see what experiences other people have had with the card on Credit Karma. Simply type the name in the search bar to see the reviews. You might find the card has stellar 5-star reviews or some not-so-great ones.

What is the APR?


Even if you don’t plan on carrying a balance, you should always be aware of the Annual Percentage Rate (APR) on any credit card you open. It’s not worth opening if the APR is sky high—you’ll just be spending extra money and less likely to be making any rewards, bonuses or points worthwhile.

Once you consider the factors above, you’ll have a better grasp on whether that store credit card will really help you out or break the bank. If you strategically use your cards, you can make it worth your while, but only after making sure it gives you the most bang for your buck.

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