by Chelsea Springli 
I love receiving those emails from stores that say that if I use their credit card that I’ll get double points or better yet that I’ll get something for FREE. There’s no better feeling than getting rewards. What I don’t remember while I’m getting blinded by perks is that while I am getting some rewards, I’m also racking up a ton of debt with a high interest rate that I may never be able to pay off.
Store credit cards aren’t all bad though. If you take the time to think carefully and avoid making the impulse decision at the counter, opening a store credit card could work out in your favor. Here are helpful tips that will hopefully guide you in the right direction.
Feel the “Earn and Burn”
Loyalty programs typically let you accumulate value through repeat purchases and then redeem that value. These programs of earning points and perks are helpful when you charge the item and then pay it off the next month. Others give you a discount on a purchase or offer benefits that non-card customers don’t get. This is what I like to call the “earn and burn”. You earn the points for making purchases and then you feel the burn of the high interest debt that you’ve accumulated. If you decide to open a store credit card, don’t open too many. Create a plan to pay off your balances so you don’t carry high interest debt for several months in a row.
Loyalty Program Overload? Stay Focused on the Goal
Whether it’s credit card rewards points, freebies, or grocery and drugstore rewards, tracking dozens of loyalty programs and their rules can be overwhelming. Even if you love a discount or freebies the store credit cards offer you, they can be overwhelming to stay on top of. All the distractions of the emails and perks will result in a debt that can be financially draining on your credit score. Don’t get too caught up in all the loyalty programs. Just make sure they work in your favor in getting what you need out of it. Rewards credit cards can help ease your budget when money is tight or help you save every month on routines purchases.
Is That Thing You Want Really Worth the Perks?
Whether it points, perks, or some other cutesy name the brand uses for loyalty currency, measure its value against cash and take a look at the rules on expiration. If the points or perks/freebies take a long time to accumulate, don’t last long, or aren’t something meaningful, then the card may not be worth the effort. Don’t impulsively say “yes” to opening a store credit card on the spot, as many companies offer a certain percentage off your first purchase when you do so. Be smart and measure out the rewards to make sure they work in your favor before opening a store card.
What About a Different Option?
While store credit cards have their perks, alternative options from Alltru may be a better fit for your needs.
Our Rewards Credit Card earns you one reward point for every dollar spent. Plus, you have the freedom to redeem those points for just about anything. You can also earn double points on certain routine purchases like gas, groceries, and food.
If you’re concerned about high interest rates, our Premier Rate Visa has a low interest rate. This will come in handy if you can’t pay your card in full when your bill arrives.
Choose the Right Card
Using store credit cards is a fantastic way to help build credit, but be cautious of the pitfalls too. At the end of the day, you just want to make sure your credit cards are working for you, not against you. If a store credit card isn’t the right option, talk to us about our credit card options that can meet your needs.
