Be Smart About Store Cards


Store cards: friend or foe? Given how tempting that on-the-spot 15 percent discount can be, signing up for a store card is hard to resist—and may even be worth it. But retail cards can also compromise your credit in ways you may not realize, says Gerri Detweiler of


    • As you know, each credit inquiry can drop your score three to seven points. It’s not a big deal—just don’t apply for a card you don’t need (i.e., won’t use the rest of the year), and don’t apply for five cards in a day.


    • More important: Since store cards tend to have lower limits, racking up a balance (even one you pay quickly) can lower your score temporarily because you’re using a bigger chunk of your available credit.


  • Also good to know: Each new account shortens the length of your average credit history, a factor that counts for 15 percent of your score.

    There are two kinds of retail cards. Most can be used in a only single store or a family of stores. Others (like Costco’s TrueEarnings AmEx) are co-branded and can be used anywhere. 


Last, even though the guy behind the register wants to get you approved, stat, take a minute to ask about the other perks offered through the store’s program. Membership has its privileges, and you want to make sure the card is worth more to you than a few bucks off that sweater.

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