Pitfalls and Strategies for Store Credit Cards

A person shopping in a store with a store credit card in one hand and shopping bags in the other, getting ready to swipe the card in the reader held by the store associate.

Our credit counseling and Debt Management Plans help with all kinds of revolving debts, including store credit cards and traditional bank-issued credit cards. Store cards can present some unique challenges for consumers.

Stores will tempt you to sign up for a credit card by offering a long interest-free period or a big discount when applying for a new credit card. They can afford to offer this discount today because they’ll make a LOT of money off of you in the long run. Store cards have much higher interest rates than normal credit cards.

Another pitfall of store cards is simply the proliferation of plastic in your wallet. Store cards are typically only used at the one store that issues them, so you can end up carrying a number of different cards for various retailers. We typically recommend not carrying around a lot of credit cards—one bank-issued card you can use everywhere is better than carrying a lot of cards.

5 Tips if you’ve already got store cards maxed out

  1. Step one is to stop borrowing. Destroy the physical card if you have to—you’ve already gotten too deep in debt with it, so you have to take bold steps to stop the borrowing.
  2. Step two is to create a written budget. Our debt counseling starts with budgeting, because only with a solid plan can you expect to conquer your maxed-out cards.
  3. Pay off the highest-interest rate debt first. Once that debt is gone, then put its payment toward the next highest rate card. Don’t worry about the overall balances at this point. Focus on knocking off the most expensive debts first.
  4. Remember, credit cards are designed to never be paid off, so you have to pay more than the minimum required payment or you’ll never make any progress toward eliminating the balances.
  5. In the future, focus on using a credit card from your personal credit union or bank, and use that everywhere. Keep your oldest credit card account open for your credit score’s sake, but only use one card—the one with the lowest interest rate.

If you need help with a budget or a payment plan that can help you eliminate all of your credit card debts, call us today for a free, confidential counseling session.

Article written by
Melinda Opperman
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined credit.org in 2003 and has over two decades of experience in the industry.

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