Reward Card vs. Store Credit Card

It’s very tempting to say “yes” when the cashier offers a 30% discount if you sign up for their card. This can sound like a great deal, after all we all enjoy a discount. But now you are confused if they are offering a store rewards program card or a store credit card.

Store Credit Card

• A store credit card CAN hurt your credit score when you sign up and if you do not manage it properly.
• Many store credit cards Annual Percentage Rate (APR) is between 25% - 30%, which is really high compared to a credit card issued by a credit union.The APR is what YOU will be paying them in interest for any balance that you don’t pay by the statement due date.
• Another selling point they use is a list of perks and inclusive discounts. These can be beneficial if you frequently shop at that store. The main thing is to make sure you are not purchasing more than you can afford.

Rewards Card

• A store rewards card does NOT affect your credit score at all. Make sure to ask the store associate to ensure that the rewards card they are offering you is not a credit card. Sometimes retailers can be intentionally devious when creating card names. They may be hoping to mislead people. Never hesitate to ask what a card is before accepting it.
• It can be viewed as a safer way to get some store benefits with low risk.
• Many reward programs are limited to only earning points at a specific store, which can be beneficial if you spend a lot of money there. Once you have gained enough points, you could get a discounted price or a free item like a soft drink.

Remember it’s totally acceptable to say “no” to both options. If later on you’re still interested, go online and do your research. That will help you understand the card options and also give you time to check out any online reviews.