Most often one finds stores offering store cards that promise various discounts and points for shopping at the various outlets of the store. The store card may be offered at very attractive prices with attractive freebies. It would be amazing to find that the store cards might be used to build one’s credit. Since application and possession store cards might be one of the ways to acquire unsecured line of credit, it would be very easy for anyone not careful enough to get into the debt cycle similar to the credit card debt cycle. Once the store card holder gets into debt, it might become imperative to seek help. In many circumstances, Freedom Debt Relief (FDR) and other debt relief companies may be involved in resolving the debt issue. FDR may be approached for debt negotiation or debt settlement for store card debts and these may be handled similar to credit card debts.

Store cards might be an easy way to build one’s credit history in case one might not be eligible for a credit card. The store cards would act as a line of credit. It might be smart not to apply for more than one or two store cards as too many credit account applications would hamper one’s credit rating. Similarly having acquired one and not using it at all or closing the same might damage the credit scores. The stores may promote the cards on the basis of encouraging customer loyalty. However, these cards would be unsecured credit lines and most often the store would require that the payments on the purchases made using the store card be made at the end of the billing cycle or payment due date.

Usually what the advertisers of the store card may forget to mention might be the annual percentage rate or the APR that would be charged on the card. It might serve to remember that every application of a store card would be reported to the credit bureaus. It might also be prudent while using the store card as the APR charged on a store card would in general be way higher than the interest rate payable on a credit card. Store cards might be beneficial if one would pay the bill completely before the payment date and not stick to minimum amount payments due to the high interest rates. The other benefit of holding a store card might be that the card holders might be given discounts and other offers on select products and might also be notified of better deals before other customers. The store card would also allow one to make purchases when one might be low on cash.

Since store cards would act more like credit cards, it would be prudent to use the card to only that extent to which one would surely be able to afford. Going overboard and making purchases beyond one’s paying capacity, especially during the holiday season when discounts and offers are abound, would hamper one’s financial situation. Like credit cards, store cards too come with preset limits for usage. However, it might be useful to apply for store cards in case one often regularly shops at the store and can handle additional bill payments. The best course of action might be to hold only one or two store cards at one’s regular places of shopping and paying the balance in full instead of revolving the credit. It might also be wise to decide upon one’s budget for spending and not be distracted by various deals and offers that may actually not be that beneficial when one gets down to the actual money part. It might be easy to fall prey to the stores discount displays and offers, especially during the holiday season and over spend on things that might be a waste. Hence if one holds a store card or one plans to apply for one, it might be better to understand how the store cards work and beware of the pitfalls. One might benefit to think hard before applying for store cards because of the negative impact of holding one and getting into debt or holding one and not using or even closing one. However to get a good credit rating, using store cards and paying balances in full might work wonders on one’s credit report.

Author Bio: Freedom Debt Relief

Category: Finances
Keywords: Freedom Debt Relief