Store Credit Cards - What You Should Know By FederatedCreditCards.Com Copyright © 2008

Store credit cards do have their uses, --though the uses are somewhat limited. Read the list of advantages and disadvantages below to determine if a store, or merchandise credit card is a beneficial option for your current financial state.

Advantages

1. Easy to apply; most store credit cards can be found and applied for directly at the counter at a large number of department and retail stores, easily, and quickly. The wide availability also means that it's easy to get in touch with a representative.

2. Acceptance is almost guaranteed, regardless of past credit history, and acceptance only takes a matter of minutes. One only needs to meet with a representative, which in some cases, is merely a sales associate, fill out the application, wait a few minutes for it to be processed; --which is usually free, and then discuss your new account if your application is accepted.

3. The credit lines are significantly larger than the secured and unsecured credit cards normally available to those with blemished credit or no credit. The average credit line is anywhere from $5,000 to $7,500.

4. Free credit line increases are often offered, as long as the consumer consistently makes their payments, and always pays off the monthly balance in full. For instance, your credit line could start off at $5,000, and then in a year, it could be increased to $7,500.

5. The account status of your store credit card will be reported to all three main credit bureaus, --providing you choose a store credit card that guarantees this. That means that eventually your credit report will show that you are responsibly managing a credit card with a high line of credit, --ultimately repairing your credit rating, and increasing your chances of being offered a standard credit card with a limit of $5,000, for example.

Disadvantages

1. Store credit cards can only be used for purchases made in the retail store from which you acquired the card from. Usually, you can use the credit card at other store locations of the same retailer, --but no other retailers, or companies will accept the card. Store credit cards, or "merchandise" cards, are specifically made to be used at only retailer locations. You cannot pay off other credit cards, pay bills, or buy merchandise from other stores with a store, or merchandise credit card.

2. Store credit cards often offer a lot of services, reward programs, etc., that you don't really need, but are still tempting offers. Then you have to pay the fee with the credit card, and now have a bill for a service, or rewards program that you won't benefit from financially.

3. Store credit cards with high lines of credit often inspire a lot of impulsive purchases, --beware of spending money you don't have on items you don't really need. Especially if your original mission was to repair your credit history, these impulse purchases, no matter how good they look, will only serve to increase the pressure of debt.

4. Ultimately, a store credit card will not give your budget the extra cash that you need, --if you're planning to acquire a store credit card, a good idea is to get it from a store where you can buy useful items for your household. A store credit card from a women's clothing store may not be as useful as a card from a more generalized retail store.