Retail store cards are credit cards that can be used only in a single store or at an affiliated group of stores. Like other credit cards, a store card will show as a line of credit on your credit report.

The advantage of these cards is that they tend to be easier to get, even if you have a poor or limited credit history. If you’re able to make consistent and on-time payments, a retail store card can be one way to help you build or improve your credit .

The disadvantage is that retail store cards may carry higher interest rates than traditional credit cards.  Also, if the card has a deferred-interest promotion, you could end up paying even more in interest if your balance isn’t fully paid off by the end of the promotional period.

Six rules for using your store credit card wisely 

1. Watch your overall spending during the holidays
2. Pay your bill on time
3. Understand the differences between zero-interest and deferred-interest promotions
4. Limit the number of cards you apply for
5. Don’t get close to your credit limit
6. Act fast if you can’t pay your bills

For more information, go to

https://www.consumerfinance.gov/about-us/blog/six-tips-when-offered-retail-store-credit-card/

Teaching Suggestions:

• Ask students if they have any retail store credit cards. If so, what has been their experience?  Share the information with classmates.
• Ask students to make a list of possible advantages or disadvantages of retail store credit cards. Share the list with the class.

Discussion Questions:

1. If there is a deferred-interest promotion, why is it important to pay off deferred balance in full before the end of the promotion period?
2. If you already have several other credit cards, will you be able to manage one more card?
3. What is the difference between zero-interest and deferred-interest promotions?