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Certified financial planner's 4 reasons why you should avoid store credit cards


According to an article published by the Business Insider, certified financial planner Sophia Bera, there are many more reasons too opt for other credit cards instead. Here’s why:

Store cards carry high interest rates


Store credit cards generally have higher interest rates — often around 25%. If you tend to carry a balance on your credit card, an interest rate this high will come back to bite you. The highest interest rates I’ve ever seen are with store credit cards.

There's pressure to spend more


All those coupons and discounts you’d get as a cardholder encourage you to spend more. That’s great for the store, but not so great for you. Here’s the thing with sales: If there’s an item you need that you would have bought at full price, getting it at a discount is awesome. However, buying something you don’t need on sale is still spending money you wouldn’t have spent. When you sign up for a store credit card, you’re also signing up for frequent nudges to buy, buy, buy, which means you’re often spending more than you would normally.


You don’t save as much as you think you will


Very few people only shop at one store, so you likely won’t save that much. Let’s say you save $100 in a year — how much did you have to spend to save that $100? There are better ways to save or make $100 than using a store credit card.


Other credit cards offer more or better rewards


If you’re looking to earn rewards for your everyday spending, there are lots of credit cards available that aren’t tied to any particular store. You can earn cash back, or rack up points that you can spend at retailers, on travel, and more. You’ll get so much more flexibility in how you use your rewards. I also like figuring out how to maximize my travel rewards just by spending money on things I would normally purchase instead of having to shop at a particular store. Why limit yourself?

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