Home article Should I Sign Up For Store Credit Cards?

Should I Sign Up For Store Credit Cards?

Should I Sign Up For Store Credit Cards?

Q: Why is it a bad idea to sign up for store credit cards when they give you a great discount on all their stuff?  


Rachel: First, you should know that I love to shop and I love to get discounts. But I still don’t recommend getting those discounts via a store credit card.

You’re taking on even more risk with one of those cards because they generally have higher interest rates than a regular Visa or Mastercard—which, by the way, are a bad idea too.

Also, you end up spending a whole lot more when you use a credit card instead of cash. When you have real money in your hand, you’re less likely to spend it because letting go of real money is painful. It’s a proven fact!

What the store wants is for you to spend more money at their store, so they are more than happy to approve you for their card. That’s why they give bonuses and little perks to the salespeople based on how many people they get to sign up for the card. The more people they sign up, the more money the store makes . . . off of you, because you are spending more money there.

Sure, you may get a discount of somewhere around 10%—so you save $3 on a $30 shirt. But you’ll spend triple that buying a bunch of stuff you didn’t intend to buy just because of the discounts. Not a smart move.

My advice is to keep your money in your pocket. When you want to buy something you really want, then buy it if it makes sense. But stay away from the glorified “IOU” known as the store credit card. Spend YOUR money instead!


Rachel Cruze Growing up as Dave Ramsey's kid, Rachel Cruze learned the basic principles of money at an early age. She travels across the country teaching those same principles, in a personal and passionate message of money and hope, to teens and young adults. To find out more about Rachel, visit www.daveramsey.com/speakers or follow her on Twitter at @RachelCruze.
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