woman pays with store credit card

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The fashion bloggers that flock to the streets of New York City during Fashion Week often share a similar money mindset: Spending thousands of dollars on a purse is the norm. Me? Not so much. I may feel frenzied by the fashion — powerful pantsuits, preppy pleats, pretty (millennial) pink! — but spending that much on style, IMO, is basically a sin. I still want to stay on-trend, so resisting the urge to spend my life savings on a pair of shoes and sunglasses can be tough. But, I believe in keeping up with high fashion as frugally as I can, taking advantage of every deal, discount, plugin and promo code possible.

So, when I’m sliding down that slippery slope of a shopping spree and a retailer offers me a deep discount just for applying for a store credit card, it can be physically hard to pass it up. Why would I turn down 10, 20 or even 50 percent off my purchase?

Well, check yourself before you wreck yourself, savvy shoppers! Even if a store credit card offers you (seemingly) shocking savings, this is one “deal” you’ll want to pass up.

Denting Your Credit Score for a Discount

Retailers often ramp up incentives to apply for a store credit card with perks like hefty discounts, sign-up bonuses or special financing. But proceed with caution: That tiny piece of plastic can not only burn through your wallet, but set fire to your credit score, too.

“I was pretty good at managing money, and I would use the store credit card to get deals,” says Stepfanie Romine, a 36-year-old from Asheville, North Carolina. “I remember it was so empowering to be a young woman who was financially independent… I thought I was being a really savvy shopper, and it was kind of a badge of honor to open your wallet and have six to eight store cards.”

Romine says she didn’t have any issues with her store credit cards, paying them down every month. Then, when she was a freshman in college, she opened a Victoria’s Secret card to take advantage of a deep deal. She used her dorm address at the time, but when the first bill came, she had already moved home for the summer and missed that important piece of snail mail.

“I ended up with a 90-day overdue bill for something that was like $50,” Romine says. “It ended up being on my credit report for a few years that I had this account that was delinquent, and it was all because I didn’t forward my mail.”

That’s why it’s stressful having a wallet stuffed with store cards; one slip-up and the dent on your credit score could last way longer than the rush you get when you score that extra 25 percent off.

Another reason store credit cards can be toxic for your credit score is because of their low credit limits. ICYMI, your credit utilization ratio–which is how much credit you’re using versus how much you’re actually offered—is factored into your credit score. I know, it’s a tease, but the less you use of your available credit, the better. So, if you’ve got a credit limit of $200 on a Gap card, and you use $100 of it to buy a few cardigans, that’s high credit utilization. No bueno for your credit score.

Even further, simply applying for a store credit card can ding your score.

“Every time you apply for a credit card you have a hard pull on your credit, which can have an adverse effect on your credit score,” says Bankrate’s credit card analyst Robin Saks Frankel. “When you open a new credit card, it becomes a part of your credit history. You need to think long and hard over whether you really need that additional card.”

Savings Are Minimal

Passing up on that extra 50 percent at checkout takes some serious self-control (TRUST), but the savings you’ll score are actually minimal when you look at how much it could potentially cost you if you carry a balance.

Let’s take a look at store credit cards and their annual percentage rates, shall we? While the national average APR for credit cards typically hovers around 16.14 percent, last year heading into the holiday shopping season, CreditCards.com found that almost half of retail-branded cards carried a significantly higher APR of at least 25 percent. Whoa.

Standout store credit cards with sky-high rates include Big Lots and Zales, both of which currently have a standard variable purchase APR of 29.99 percent.

“Store credit cards have notoriously high interest rates,” Saks Frankel says. “The value of any discount you get from owning the card will likely be outweighed by the interest charges you’ll get if you don’t pay your balance in full.”

While you can obviously avoid paying interest on your purchases if you pay down your balances in full and on-time every month, the more cards you have, the harder it is to stay organized and make sure every bill is paid off in full and on time, all the time.

Additionally, be wary of 0% interest store credit card offers; they have a nasty habit of sneaking up on you under the guise of a good deal. With this offer, interest is often waived if you pay off your balance under a set period of time. However, if you miss that payment or even have just a little left to pay after the intro offer expires, you can end up having all that accrued interest added retroactively in a lump sum to your balance.

That “deal” doesn’t sound too great anymore, does it?

Bottom line: Store credit cards might look appealing at first glance, but oftentimes, they do more harm than good (kind of like those sticky-sweet cinnamon buns you find in the mall).

“Unless you buy the vast majority of your wardrobe at one retailer, it’s probably not going to benefit you,” Saks Frankel says.

Instead, opt for a credit card that rewards your shopping splurges with perks like cash back or frequent flier miles. The, all you have to do is hit the sales to rack up the rewards. And let’s be real: Saving money is something that will never go out of style.

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