Does having a few store credit cards help maintain good credit?
The More Cards, the Higher Risk
The answer is simple – no! The more credit cards you have the higer risk you’ll miss payment or overspend
limit you are able to cover with your income.
Balance on a Store Credit Card
Most credit cards won’t charge you anything when you pay down the balance each month. Only one late payment
changes the situation instantly. Even if you are one day late, penalty fees (late payment fee) will be charged on
your card and your credit score will go down. Moreover your introductory interest, if you have one, can be terminated
or your current rate can be raised by credit card issuer.
Understanding How Store Credit Cards Work
That’s exactly what credit card issuers expect from us, especially those who provide store credit cards.
What you think when you get a retail store credit card is that you will receive special offers or discounts.
And of course you will! Credit card providers will offer it in order to get you in the store to buy and spend more.
And while most of the consumers will pay off balance on time, credit card providers assume that some of the customers
will miss the payment or won’t be able to pay it off because they spend what they did not have.
That’s a huge problem for people who does not understand how credit cards work. Often when a person get a coupon
from the store he rushes to buy something that he doesn’t really need but to get a 10%, 20%, 30% or more discount.
And what if the person has more than one store credit card… It can easily get him into a debt with overspendings or just because
it’s difficult to maintain a few credit cards.
What to Do
To avoid these mistakes set up text or email alerts on your cards which can help you be aware of your spending, payment
due date and other transaction on your credit card. It’s often free and takes just a few minutes to set up.
Think twice before applying for a store credit card. Do you really need the card? Do you shop regularly in the store or
you applying because of a huge discount you will get in the day you sign in or promotional offers which you will receive lately?
Money on a credit card is never yours!
Updated: January, 2 2012