Store Credit Cards Likely To Increase Debt
While credit cards can be a great way to help build a consumer's FICO rating, some cards are better than others. Store-specific cards tend to have high interest rates and longer repayment times, and may not be the best avenue to go down.
Store cards are very easy to apply for, and many include a long list of in-house discounts, according to Investopedia. The drawback to this type of account is the high interest rate that comes along with it. Department store cards have rates that can rise between 25 and 30 percent.
These outlets do not check credit ratings every time a card is applied for, the news source reported. This can be very damaging to a consumer, as credit card debt can accrue rapidly.
Credit card debt, or low income can deprive some consumers of being able to obtain any card other than one from a store chain, the source said. Because employees who work at the stores are often instructed to sign up as many people as possible, and those who apply for the card may not know how to deal with using it.