If you are shopping in person, you will likely hear one question more often this year: Do you want to apply for our store card? Store cards can be tempting, especially when you are making a big purchase, and accepting the line of credit means an additional discount.
However, store cards do have especially high APRs
"We always recommend paying your credit card bills in full because really all credit card rates are high, but store cards are even higher, and in fact, they top out around 30 percent -- 29.99 percent to be technical," says Ted Rossman, senior industry analyst, CreditCards.com.
Rossman adds that there is also generally no range, so the higher interest rate will stay high regardless of your credit score.
"A lot of us are going to be offered these at the checkout this holiday season. 'Hey, do you want to save 10 percent off today's purchase? Get our credit card'-- You really want to be thoughtful about that," says Rossman.
There is a better chance you will get the line of credit even with a subprime credit score, and the limits tend to be lower.
However, they are credit products, applying will hit your credit, and if you do not use it responsibly it could tank your score. Still, some store cards can offer good discounts for large purchases and rewards-- think of Target, Amazon, Lowe's, and others-- but it's still best to pay your bill off in full every month. '
It's important to do some research instead of making a decision on the fly.
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