Nowadays, you will find nearly all stores offering their branded store credit cards. You may have been tempted a few times into getting one (if you don't have one or more already). But how different are they to the regular cards? What can you get from one? Are there any benefits?
You can only use it in the one type of store, the store of issue. Add to that limitation the fact that they often have the highest interest rates -- much, much higher than the interest rates for regular cards. They can be particularly tempting to acquire, especially around holiday times. You would be very wise to think twice before signing on the dotted line and accepting a new debt problem.
Just how tempting can they be? Let's say you're in a store, and a nice lady approaches you and offers you a free gift if you sign up for their latest offer. If it isn't a free gift she's offering, it may be a 20% discount on all items you purchase today whilst using it. As tempting as either of those offers are, you'll be better off walking away from that nice lady.
High Interest Rates on Store Credit Cards
Why? As mentioned earlier, they have very high interest rates. For another, it is very easy to overspend when you have access to another source of borrowing. You'll end up buying more at that particular store, instead of shopping around in different places, comparing prices and purchasing the items that meet your budget.
It actually makes more sense to use a regular card as you can use it anywhere. Therefore there are no limitations to its usage. If you are a traveler, it is likely that it will be accepted around the world or at least in many locations. The other advantage is you can shop and use it at any store and you won't be charged as high an interest rate as you would be on your store credit card.
James K. Williams is a former small business owner. He specializes in debt management, real estate, loans and finance. For more information on credit card debt visit 'Debt and Refinancing' at http://debtandrefinancing.com
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