Evaluating a Store Credit Card By FederatedCreditCards.Com Copyright © 2008

1. Where can you make purchases, and what purchases can you make? - Ask the sales representative or the retail card issuer where you'll be able to make purchases with that card. Will it only be at that store? Can you make purchases at other store locations? What products are available at the store, or online? Are these things you will actually be using at home, or will they end up being something you impulsively buy on a whim? Ask yourself and the retail credit card issuer these questions before making a final decision.

2. Are there any set-up fees? - Find out before applying, whether there are application fees, set-up fees, initial processing fees, or anything similar. Otherwise, you may end up paying an expensive credit card bill before you even make any actual purchases on your new credit card. Furthermore, some fees are higher than others, even to ridiculous amounts, such as $150 just for monthly maintenance, or start-up processing. Other fees to ask about are APR, and interest rates, as well as annual fees. For the most part, the majority of retail credit card issuers do not require you to pay excessive interest rates on purchases, or even recurring annual fees, but it's still important to ask.

3. Hidden Fees - Naturally, this is going to be a more investigative set of questions, which means that you're going to have to be more specific. For example, try asking what kind of fees you'll be paying annually, or the total fees you'll be expected to pay monthly. Or, is there anything you can do to trigger extra fees, even if it's just defaulting on a payment. There will almost certainly be offers of attractive additional services, most likely accompanied by more fees, that you don't really need or have use for. Know what to expect, by reading the fine print and asking a lot of questions.

4. When and what do you have to do to trigger extra bonuses? - Most of the time, the extra services that store credit card issuers open up for their owners, are purely superfluous, and serve only as attractive tempting offers for you to spend more money. However, on the other hand, there are other offers of course, that the issuers provide that can be useful. Such as credit increases, or discounts on other services. But if there are membership fees, a few coupons now and then will probably not end up being equivalent to the fees you paid for the membership.

5. How often will your account status be reported to the three main credit bureaus? - Simple question to ask, and highly important, considering that the objective of this mission is to improve your credit rating. Review the terms and conditions closely, and ask the retail issuer, --but if they don't know, feel free to call the card issuer headquarters, and ask them. It's better to know, than not know, and find out later that the card is not helping you.

6. How are payments made? - A large number of store credit card issuers also set-up your bank account so that when payment is due, your debit account is automatically charged, and the payment is deducted. This shouldn't be a problem if your bank account is always kept up to date, and if you're always responsibly aware of when the payment will be deducted. If this sounds like something that might cause problems for you, then it might be more effective to consider a secured credit card, or a prepaid credit card as a safer alternative.