Experts Say This Is The Only Reason To Get A Store Credit Card (And It’s Not The 20% Off)

You’ve got an armful of goodies at the register, and it’s ringing up to be a little bit more than you’d expected. But you’re in luck; the salesperson tells you if you sign up for the store credit card, you can get 20% off the total. You shop at that store all the time, and the salesperson tells you you’ll earn rewards if you use that card when you shop there, so why not, right? So should you get a store credit card, or are there hidden drawbacks to getting one?

If you're thinking a store credit card is like a regular credit card, you should know they don't always work the same. Rachel Sanborn, director of Advisory Services at Ellevest, a personal finance firm for women, tells Bustle, "Store credit cards usually can't be used outside the store unless they are co-branded with a major company like Visa or American Express, [and] they often have very high interest rates compared to major credit cards."

Sanborn says the major benefits to getting a store credit card include the store rewards, the ease of qualifying for them, and those zero-percent interest promotional periods. And those promotional periods can be great if you know you can pay the balance off in full by the time that promotional period ends, Sanborn tells Bustle, because it can be a great way to get a big-ticket item, like a washer or a TV. But retailers usually set it up so you can almost never pay that balance off in full by making the minimum payment each month, says Sanborn, so you could have all that accrued interest left to pay if you didn't pay enough each month.

Applying for a store credit card can also affect your credit score. Dale Sperling, chief marketing officer of digital finances services company Stash, tells Bustle, "When you open a store credit card, it may result in a hard inquiry on your credit report. [This] has the potential to stay on your report for a few years and can cause a temporary dip in your credit score. Additionally, store credit cards can come with lower credit lines, making it easier to exceed the 30% credit usage threshold" — meaning, you spend more than 30% of your available credit — "used by credit bureaus to help determine your credit score.” (Using less than 30% is generally considered a best practice.)

With all these disadvantages stacking up, it's no wonder nearly half of Americans who've had store credit cards say they regret getting one, according to a survey by CompareCards. Gen X reported regretting getting store credit cards the most, says CompareCards, followed by younger millennials. But Sanborn tells Bustle it's not all doom and gloom.

"If you know you shop at one store all the time and you know you pay off your card in full every month — or weekly or daily; you don't have to wait a month to pay off a card — then the store rewards can really be worthwhile," says Sanborn.

The bottom line is you have to do the math on this one. If you don't pay attention to the fine print, you could be paying tons of interest, hurting your credit score, or not actually getting the rewards you think you are. This is definitely not a decision you want to rush into at the register.