Why Department Store Credit Cards Are A Bad Idea Article

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Why Department Store Credit Cards Are a Bad Idea

Learn why department store credit cards are a bad idea. Find out what you need to know when shopping for a credit card.

Author: Lisa Nichols

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Although getting a department store credit card can sound promising, it can often be a bad idea. Department store credit cards are offered by stores to their customers and usually include special cardholder sales or special financing offers. It's not uncommon for a department store to offer a one-time discount to people who sign up and begin using their credit card right away. However, the long-term disadvantages of using a department store credit card far outweigh the benefits.

The High Price of High Interest Department Store Credit Cards

The biggest problem with department store credit cards is their notoriously high interest rates. While you can easily find a zero percent interest rate or a low interest rate credit card online, department store cards have interest rates that often hover around the 20-30 percent range. Even with sales or discounts, department store cards still end up costing customers a lot of money in the long run.

Responsible Use of Credit Cards Improves Credit Scores

Using credit cards responsibly is critical to improving a credit score. Owning a limited number of cards, having available credit that isn't being used and paying bills on time all contribute to establishing a solid credit history. A department store credit card can be dangerous, because it opens the door to having too many credit cards and getting into too much debt. A major low interest credit card will be accepted at department stores, eliminating the need for alternative lines of credit.

How to Unload Department Store Credit Card Debt

Reduce credit card debt caused by department store credit cards. High interest rates, high fees and the minimum purchases required by many department store credit cards make them expensive. Cardholders can save money by getting one low interest card, and transferring all of the high interest debt from their department store credit cards to the new card.

Compare credit card reviews online at Experts on Credit to find the best deal for you.

About Author

Lisa Nichols is a freelance writer, website content strategist and marketing and PR strategy consultant. Originally from Eugene, Oregon, Lisa is currently based in Covington, Kentucky (also known as greater Cincinnati, Ohio).

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Why Department Store Credit Cards Are a Bad Idea