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Are store credit cards worth the discounts?

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

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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.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit www.morganstanleyfa.com/ringer
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of CardHub.com, a credit card and gift card marketplace, and WalletHub.com, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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