Are Store Credit Cards Worthwhile?

Okay, so I’ve been holiday shopping and about a dozen or so times so far this festive season I’ve been greeted at the checkout by a cashier who wants to know A. If I have “insert store’s name here” credit card and  B. Would I like to sign up for one? Usually doing so results in an immediate benefit such as fifteen percent or so off my purchase that day. Of course, there are usually exclusions and so any big screen televisions or similar big ticket items that I’d like to buy would be exempt to such a large discount (but would probably be eligible for a somewhat smaller discount). Regardless, money off is money off and with so many looking to save (as well as Holiday shop) during tough economic times store credit cards may sound appealing. The question is, after the immediate discount are they really worthwhile?

It depends. The problem with these cards is that they generally come with hefty interest rates, which can nullify any savings you’ve received. If you’re saving fifteen percent one day, but paying twenty-nine percent or so in interest, it’s really not the best deal. However, like most credit cards the benefits are biggest for those who are able to pay off their balances each month, avoiding  paying interest entirely while  still enjoying all the benefits of the card. Unfortunately due to very large interest rates, if you’re not the type that’s in the habit of paying off your entire balance each and every month, no store credit card is likely for you. None I’ve found, at least.

If you are a full balance payer then you then you’ll want to look at  any yearly fees or other fees your prospective card comes with before adding it to your plastic shopping arsenal. According to Consumer Reports some cards worth considering are those offered by Gap, Banana Republic, Piperlime, Athleta and Old Navy as they offer a fifteen percent credit on your first purchase as well as five points for each dollar spent at any of the aforementioned retailers. Furthermore, the Barnes and Noble card is given high marks, as it includes not only a twenty five dollar gift card, but up to five percent off purchases as well.