5 Reasons to Turn Down Store Credit Cards

These days, you can hardly shop without being asked to sign up for a store’s credit card. Saving 10% may be enticing, particularly on larger purchases, but declining the offer may be a better idea. Here’s why.

Just a One-Time Discount

You only save 10% the one day you apply for the credit card and only if you get approved for the card. Sure, getting a discount on a purchase is a good thing, but you may never that kind of discount again. And if your credit application is turned down, you won’t receive any discount at all. Your credit, on the other hand, could take a small hit from the application.

Many retail cards do come with a rewards program that gives you a discount on future purchases, but you only earn this discount after making a certain amount in purchases on your credit card.

Not Enough Time to Review the Card

You don’t really have time to evaluate the credit card terms while you're standing in a checkout line. You need time to review the credit card terms – the interest rate, fees, rewards, etc. – and compare the card to other cards on the market before you apply for it. Sometimes clerks don’t even give the appropriate disclosures before having you apply for the credit card.

If you’re interested in the credit card, ask the store clerk for a copy of the credit card disclosure so you can review it later. Or, look for the terms on the internet once you get home. You can always apply for the credit card later once you’ve educated yourself about it.

You Need to Review Your Finances First

Another important part of taking on a new credit card is making sure you can afford it. If you’re having trouble paying the bills on the credit cards you already have, you don’t need another one in your wallet. Also, opening a new account means you’ll have an additional bill to pay and another account to manage. Another credit card may not be a problem for you, but you need to make that decision when you’re not under pressure from a cashier.

You May Be Tempted to Spend More

Having a line of credit open at a single store can tempt you into spending more money at that store. You may be able to exercise more self-control over your spending when it’s just you and your cash. But put a retail credit card in the mix and you’re more likely to spend money in that store. That’s what the stores and the companies who issue store credit cards are hoping for. Save yourself the need for additional restraint and turn down the credit card application.

You’re Applying for a Major Loan Soon

Another good reason to limit new credit card applications – you’re planning to buy a house or car soon. Mortgage and auto lenders look for stability in your finances. If you’ve taken on new loan obligations in the months prior to your loan application, you could be deemed a risky borrower and turned down for the loan. Make yourself the best possible loan candidate by avoiding any new credit cards about a year before you apply for the loan.

You may be interested in saving a few dollars on your purchase and the benefits of the retail card may seem amazing, but those cards are often a bad idea, especially spur of the moment. Ask for a brochure to research any cards you’re truly interested and turn down all the other applications.