Ask Yourself This Before You Open A Store Credit Card

Opening a store credit card can provide many perks and discounts that could save you money immediately. However, in the long run, it can also be a source of stress and a damper on your credit scores. Whenever you find yourself asking, “Should I open a store credit card?”, remember to also ask yourself these five key questions so that you don’t fall into a honey trap.

1. Can I afford the purchase?

The number one thing you should ask yourself: Can I really afford this purchase if not for the discounts and perks that I’ll be getting when I open the card?

Some retailers offer an introductory 20% discount or complimentary items when signing up for a store credit card. But are you only signing up for the credit card because you wanted the discount?

This is a trick most retailers use to get you to sign up: they offer a seemingly fantastic deal at check-out, when things are usually hectic. The retailer is forcing an impulse decision that has a little bit of short-term benefit for you and a lot of long-term benefit for the retailer.

2. Am I going to shop here often?

Unlike co-branded credit cards (which are under the Visa and Mastercard network) that can be used anywhere that has association within the network, store credit cards can be inflexible when it comes to using the card at other retailers. Most store credit cards can only be used at the store of purchase.[1]

Peek into your purchase history over the years and take a close look if you shop there often enough to warrant opening a credit card.

3. Do I know what the interest rates are?

Store credit cards actually have higher interest rates than a typical credit card and could offset the discounts and perks you’ll be getting when you carry a balance.

Some store credit cards offer close to 24.99% APR on all purchases when you carry a balance.[2]
Empeople’s Visa® Signature Credit Card offers as low as 13.25% APR on balances, depending upon your credit score. With Empeople being roughly half the APR, the difference can be pretty significant.

4. Do I already have other credit cards open?

If you have other credit cards currently open, it could be a bad idea to open a new one. Your credit score is determined by the number of credit cards open, credit utilization, how long you’ve had cards open, and how many credit applications have taken place during a short period of time. New credit card inquiries remain on your credit report for two years, and applying for too many at the same time can dent your score.[3]

5. Am I taking out a loan or a mortgage soon?

Speaking about making a dent in your credit score, if you are planning to take out a loan or mortgage and will be going through a credit check in the near future, try to avoid opening new lines of credit. Opening new lines of credits could cost you a fair bit in the long run when your credit score decreases. There could be a possibility that you would only be approved for high interest rate loans.

Find out how to improve your credit scores.

In conclusion, store credit cards may offer an enticing introductory discount and reward(s) to get you to sign up. You very likely could be pressured to sign up for a store credit card when checking out at the register — but with careful consideration, you can be confident when making the decision.

Consider shopping with a general use reward card that offers versatility when redeeming rewards. Empeople’s Visa® Signature Credit Card offers a 1.5% cashback for every dollar you spend, while offering rates almost half that of store credit cards. And what’s more? You can use the card at any participating stores within the Visa card network to get that sweet cash back.


[1] Credit Karma – When To Open a Store Credit Card

[2] The Balance – How Store Credit Cards Are Different From Regular Credit Cards

[3] Business Insider – 4 times you should never open a store credit card — and 3 times you should