Retail Credit Cards

Credit cards can be helpful in many ways. They allow us to buy now and pay later, making it possible to buy things we couldn’t otherwise afford. They eliminate the need to carry large amounts of cash, and if they’re stolen the holder is responsible for little or none of the amount of unauthorized charges. And they make it easy to make purchases online or over the phone.

But credit cards can also get us in trouble. If we don’t pay the balance in full each month, we must pay interest charges until it’s all paid. It’s also too easy to keep building up a higher and higher balance, paying only the minimum payment until we’re in debt over our heads. And if we are late with a payment or go over our credit limit, we could be subjected to fees and interest rate increases.

Some consumers apply for store credit cards in an effort to avoid some of these problems. Store credit cards usually have a lower limit than regular credit cards, so you can’t run up an insanely high balance with them. And in most cases, they may only be used at one store or chain of stores, so there is less temptation to use them to buy anything and everything.

But what many store credit card holders do not realize is that these cards often cause even more trouble than regular credit cards. This is true for several reasons:

Even if you pay your balance in full each month, a store credit card could adversely affect your credit. In most cases, you’re better off just using a regular credit card (or better yet, cash). Even if you miss out on a deal or two, you’ll usually still save money in the long run by leaving store credit cards alone.