Considering a Store Card for the Holidays?

Though the Christmas and holiday decorations have been slowly creeping up on store shelves for the past couple of months, the tinsel and evergreen is now front and center in just about every store. The holiday season is upon us! Everyone’s budgets are a bit tight this year but we still have all those gifts to buy no matter what the economy has to say about it. You’ll probably be tempted the next time you come face to face with a cashier, “would you like to save 15% by applying for a –insert store name here – card today?” Normally you’d just brush off this sales pitch but today that 15% and a deferred payment is sounding pretty tempting. Don’t do anything rash, wait a minute!

Take a minute to consider all of the factors. Don’t let the line of screaming children and blabbering customers on their cell phones behind you rush you into possibly flushing your credit down the toilet. Consider these few aspects before you accept:

• What is the interest rate?

• Is this a one-time savings of 15% off?

• Are there any other awesome perks to go with this card?

• Are there yearly fees?

• Should I really add another credit card to my wallet?

• Do I shop here enough to make it worth it?

If you answer all of the above questions and decide that letting the cashier run your credit is worth it, now you have to commit to that decision! Opening a new card will always hurt your credit score about 10 or so points immediately. Don’t forget to add this new balance to your monthly budget and make your payments on time of course. If you miss a payment you’ll likely face a huge increase in interest as well as late fees, which will completely nullify any discount you received at the register for applying for the card. Also, paying off and closing a card will also hurt your credit as well – seriously – so if you’re plan is to reap the savings on this one purchase and then close out, you may want to think again.

Happy holidays shoppers!