Why you should avoid store credit cards this holiday season

We’ve all been tempted to open a store credit card—especially during the holidays. Sure, those sign-up bonuses can be great, but if you carry a balance on one of these cards, the interest you pay with those high APRs can easily exceed what you saved with the initial store discount!

While the salesperson does a great job of talking about the perks and discounts you can get when you sign up, they almost never do an equally great job of talking about the interest rates and high payments you’ll have when you use it. In fact, the average APR for a new store credit card is 24.24%. That’s pretty hefty!

If you still want to open store credit card, you’ll need to watch out for hidden catches. Here’s what you’ll need to look out for:

  • Deferred interest: Special financing deals really can save you big bucks, but it’s crucial that you play by the rules, because what you don’t know can cost you.
  • Sneaky APRs and fees: This is good advice with any credit card, but it’s particularly important with store cards because the interest rates are so high, and the pressure is often on to make a quick decision.
  • Deadlines, exceptions, and spending minimums: Virtually every card has quirks and nuances. The more you know about them before you apply, the better.
  • The other logo: Some store credit cards can only be used with one retailer or one group of retailers. Others can be used most anywhere. That’s an important distinction.


The best tip we have, though? If you’re offered a card and aren’t sure what to do, say no. You can read up on the card at home and make a decision next time you shop there.

Better yet: you can bypass all of the potential downfalls of the store credit cards and seek alternatives from GMFCU.

We offer credit cards and Holiday Loans at competitive interest rates. While you won’t get 20% off your first purchase at your favorite store, you won’t be counted in the chunk of people with buyer’s remorse after opening that store credit card. You’ll also enjoy a much lower interest rate, which equals much lower monthly payments!


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