Doing our part to kick-start the economy, my wife and I went shopping for a new couch last week. With our kids recently past toddlerhood and (hopefully) beyond gouging or slobbering on every piece of furniture in the house, we were ready to go a bit more high-end. We were still watching the cost, though, so when we found our couch at Macy's and the salesman asked if I'd like to open a charge account to save $100, I was tempted. (Technically, it was supposed to be 10 percent off, but the discount topped out at $100.)
One hundred dollars is not an insignificant amount of money, especially with holiday shopping also on the agenda. But, after much tortured debating (both inside my head and between me and my wife), I passed on the card.
Why? Two reasons—and I believe they are reasons that anyone considering the high of a one-time discount should consider before applying for a store credit card:
While I turned down the latest offer that came my way, I admit I've gone for the short-term store card discount in the past. What always made me unhappy in the end was the fact that I opened a new line of credit for a card that could only be used at one store. Thankfully, many retailers, such as Target, Nordstrom, and others, have seen the writing on the wall. They've paired up with Visa, MasterCard, American Express, or Discover to offer credit cards that reward their customers while giving those customers the freedom to use the cards almost everywhere they shop.
In this holiday season when money's tight for just about everyone, it will be especially tempting to take retailers up on their offers for new card discounts. I won't discourage you from saying "yes," but I hope I've given you some insight into why you might say "no."
Have you had a good experience with store credit cards? Or a bad one?