Many people believe that being able to get whatever they want can make them happy. They don’t seem to care at what expense. The way most people can have what they want is due to credit. Having credit is a means of purchasing something now and paying for it later. There are advantages and disadvantages. Unfortunately, most have a hard time managing their credit and maximize their spending limits and move on to more credit opportunities.
It’s easy for a person to get a store credit card. This allows a consumer to spend more of their money with a particular store. The consumer is happy because they are able to afford what they want and the store is happy because they are not only receiving more revenue from a person’s purchases but also from their lack of paying that borrowed money off.
The Advantages of Store Credit Cards
So are there any advantages of getting a store credit card? There absolutely are. Having a store credit card can:
- Allow a person to buy something when they don’t have the available cash.
- Enable a person to take advantage of store incentives such as discounts, loyalty programs, and cash back opportunities.
- Help consumers establish or rebuild their credit.
- Store clerks can look up a credit card account to charge their purchases to if consumers forget their cash.
The Disadvantages of Store Credit Cards
If the advantages sound great that’s because it can be. There are however more dangerous disadvantages of having a store credit card and becomes a waste of consumer’s credit. If consumers do not pay their monthly balance off they are throwing money away. This shows evidence of the wastes of store credit, because it can be so harmful.
- Some store credit cards offer a cash rebate. What they have noted in the fine print, that most people never read, is how much they need to spend on an annual basis to achieve that cash back. That could be more than they would spend in a two year period.
- Some stores offer a loyalty program of which they constantly send card holders exclusive emails, text messages, and coupons in the mail. While it’s always great to receive discounts, a person is now enticed to do unnecessary shopping. Some of the program invites are only applicable if consumers use the store credit card to receive the discount.
- The interest rates on the store credit cards are extremely high. Some interest rates can run over 20% which is more than an average credit card.
- Having too much credit on consumer’s credit report can be a bad idea. This leads to the wastes of store credit if it sits on your account too long. This is especially true if a person is looking to take on a higher debt such as a mortgage or auto loan. If the credit card debt gets out of hand it can adversely affect the card holder’s credit.
So the disadvantages are drastic as they can ruin a person’s expectations and their credit. If a person is not 100% responsible with paying their credit off each month, they are looking at paying drastic fees. The best thing is to use cash to avoid all the hassles.