If you do your shopping at a big enough store, odds are good you'll be asked if you'd like to sign up for a store credit card, also known as a retail credit card. These credit cards are the same as other credit cards, and they usually offer additional benefits if you use the store credit card at the store in question.

Before you apply for that credit card, though, you should make sure you know what you're getting into. Store credit cards do give their regular shoppers quite a few benefits, but they also have some drawbacks you should be aware of. We'll let you know what the pros and cons these credit cards have, you'll be able to make a more informed choice about whether a store credit card is your best option.

What are the pros and cons of owning a store credit card? 

Pros of Owning a Store Credit Card

• When you get a store credit card, you get access to a lot of exclusive offers made by the retail store. This might consist of a large initial discount on your first purchase with the card, and a regular discount on all purchases thereafter. Some store credit cards might even offer a retail program.

• In addition to discounts, many store credit cards also offer you the opportunity to earn rewards points. Keep in mind that, like other rewards credit cards,  you'll need to make multiple purchases before you can accumulate enough points to redeem, and the rewards will never fully offset how much you spend. If you're already a regular customer of the store, though, you can use the card as you normally would and take advantage of the rewards points once you've gained enough. 

• Store credit cards can be a good way to build up a credit history. By paying off your balance each month, your credit score will improve and you'll build up your record of paying bills on time.

Got questions about how to use credit cards? Ask us!

Cons of Owning a Store Credit Card

• Store credit cards can also have high disadvantages. One of the biggest disadvantages is that many of them have a high interest rate, even when compared to other credit cards. If you carry a balance on this type of card, it can quickly spiral out of control, so you need to make sure you pay off the balance each month to avoid credit card debt.

• The spending limits for store credit cards are usually very low. You won’t be able to make as many purchases on a card.

• Oftentimes, retailers don’t make the terms of holding a store credit card clear to you. You will need to read the fine print to avoid being forced into fees you didn’t anticipate, such as an annual fee.

  
  
  

Credit Card at First Alliance Credit Union 

Store credit cards can seem attractive, especially if you're already a regular customer of the store in question. However, you need to be aware of the pros and cons of these types of credit cards. Make sure you use your credit card wisely, and avoid carrying a balance on your card. 

You can also get help managing your credit cards when you become a member of First Alliance Credit Union. You can use the electronic bill pay feature of our online banking platform to easily pay off your credit card bill each month, and you can use the free downloadable budget creator on our resource page can help you avoid overspending. You might also want to take a look at our rewards credit cards, which have no annual fees, a lower interest rate than most other credit cards, and let you earn rewards points no matter where you shop.