3 Tips for Making the Right Decision with Store Credit Cards

I love receiving those emails from stores that say that if I use their credit card that I’ll get double points or better yet that I’ll get something for FREE, there’s no better feeling than getting rewarded. What I don’t remember while I’m getting blinded by perks is that while I am getting some rewards, I’m also racking up a ton of debt with a high interest rate that I may never be able to pay off.

Store credit cards aren’t all bad though, if you take the time to think carefully and avoid making the impulse decision at the counter, opening a store credit card could work out in your favor. Here are three helpful tips that will hopefully guide you in the right direction:

  1. Loyalty program overload? Stay focused on the goal.

Whether it’s credit card rewards points, freebies or grocery and drugstore rewards, tracking dozens of loyalty programs and their rules can be overwhelming. Even if you love a discount or freebies the store credit cards offer you, they can be overwhelming to stay on top of. All the distractions of the emails and perks will get you caught up in a debt that can be financially draining on your credit score. Don’t get too caught up in all the loyalty programs and just make sure they work in your favor in getting what you need out of it.

  1. Feel the “earn and burn”.

Loyalty programs typically let you accumulate value through repeat purchases and then redeem that value. These programs of earning points and perks are helpful when you charge the item and then pay it off the next month. Others give you a discount on a purchase or offer benefits that non-card customers don’t get. This is what I like to call the “earn and burn”. You earn the points for making purchases and then you feel the burn of the high interest debt that you’ve accumulated. If you’re currently caught in the “earn and burn” slump and you have high interest debt, check out a 1st Financial Credit Union Rewards Credit Card. You still earn the points that can be redeem for what you choose, but it’s not connected to a sky rocketing interest rate that you can never overcome.

  1. Is that thing that you want really worth the points or perks?

Whether it points, perks or some other cutesy name the brand uses for loyalty currency, measure its value against cash and take a look at the rules on expiration. If the points or perks/freebies take a long time to accumulate, don’t last long, or aren’t something meaningful, then the card may not be worth the effort. 1st Financial Credit Union Rewards Credit Card earns you one reward point for every dollar spent, plus you have the freedom to redeem those points for just about anything. Be smart and measure out the rewards to make sure they work in your favor.

Using store credit cards is a fantastic way to help build credit, but be cautious of the pitfalls too. At the end of the day, you just want to make sure your credit cards are working for you, not against you.

Be alert and swipe smart,

chelseaSpringli_signature

Chelsea Springli

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