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Are store credit cards worth the discounts?

Posted by Jill Boynton November 18, 2008 09:25 AM

The Christmas season is fast approaching. It's the busiest shopping time of the year and as you step up to the check-out counter, get ready for the inevitable offer to open a store credit card. The offers may be very tempting this year - as much as 25 percent off your first purchase. But a close look at the terms and conditions of the card may make you say "no, no no" instead of "ho, ho ho."

Be sure to take a few minutes to read the fine print before signing the account application. Step out of line if you have to - don't be pressured to act quickly. Look for annual fees - if you're saving $25 today on your $100 purchase, but will have to pay a $50 annual card fee, then you're not saving anything. Also take note of the annual percentage rate, which is often higher than 20 percent. You could end up with hefty finance charges if you are not able to pay off the card balance within the billing period.

Finally remember that too many credit cards can hurt your credit score. Stick with a few cards that you can use everywhere, give you rewards you can use and have reasonable interest rates.

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Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.
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About the contributors

Jill Boynton is co-founder of Cornerstone Financial Planning in Newington, N.H. Along with traditional financial planning services, Boynton provides analysis specifically for divorce.
Andrew Chan is the founder of Integrative Financial Advisors in Framingham. He provides comprehensive financial planning advice and investment management services. He has been an adviser for over 12 years and works with clients to integrate all aspects of their finances including investments, retirement, education funding, and tax planning.
Cheryl Costa is a managing director at AFW Wealth Advisors, which has offices in Natick and Purchase, N.Y. She advises clients on investing, education funding, and estate planning. She holds a master’s in business administration from Boston University.
Jamie Downey has been an accountant for more than 14 years. He's a partner at Downey & Co. in Braintree. Prior to joining the firm, he served as a manager in the audit department of accounting firm KPMG.

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