Should You Open a Store Credit Card for the One-Time Discount?

The discounts can be tempting, but make sure you understand all the terms before you jump on your favorite store's credit card.
Anisha SekarSep 1, 2020

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As you did your holiday shopping in recent years, you were probably deluged with offers to save money by signing up for a store’s credit card. Sales associates often offer customers a one-time discount of 10-15% for applying – and it’s working. According to , Americans currently have more than 183 million retail-issued credit cards. If you’re making a large purchase, the savings can be tempting, but are store credit cards a good idea in the long run? It depends.

Unfortunately, no matter how good the discount sounds, store credit cards are usually a better deal for the issuer than they are for you. Consider:

As always, opening a credit card should not be done on impulse. Review all the factors carefully before deciding whether or not it’s worthwhile; don’t let your sales associate pressure you. After all, would you make any other important financial decisions in a busy check-out line? 

If you’re generally financially responsible – paying your balance in full each month and spending within your means – having a credit card issued by one or two of your favorite stores may not be a bad idea. Many companies offer exclusive discounts or generous financing terms throughout the year to those holding their cards. And if your purchase is large enough – say, over a thousand dollars – even a one-time discount could save you a lot of money, as long as you don’t misuse the card in the future. 

Moreover, if you want to improve your credit, department store cards can be more accessible than other cards. They also add variety to the types of loans you have out, as well as raise your overall credit limit and increase the number of open accounts.

Just be sure not to sign up for cards at too many “favorite” stores. Having many accounts increases the risk of overspending if you use them, and the risk of identity theft if you don’t. 

There’s no right or wrong answer when it comes to store credit cards. If it’s a bad idea for you to sign up for another card, making it a retail-issued card just makes it worse. But if you have good credit and can take advantage of the discounts that come with the card without going overboard, it might be useful. You may also be better off signing up for a standard , though, so evaluate all of your options before taking the plunge.

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