Why You Should Say No to Retail Store Credit Cards

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By Maryann Komes of Pilmer Real Estate, Inc.

It’s tempting.  I know.  You’re in the checkout line at your favorite store.  You have $200 in items and the checkout person says “I can save you 25% off your purchase if you apply for our credit card.”  Saving $50?  Heck yeah!  But wait…does it really save you?  Maybe you’re thinking I’ll just open the account, pay off the balance and then close it.  Either way, it’ll cost you more in the long run than the $50 you’ll be saving that day.

Every time you open a credit card, your credit score takes a hit.  Every time you close an account, your credit score takes a hit.  Eventually, this could potentially affect your ability to get a good interest rate on a car loan or a mortgage.  You would be paying far more in interest than the $50 you’d save that day.  On a $200,000 mortgage, the difference of just 1/4% on the interest rate could cost you almost $10,000 in interest over the life of a 30 year mortgage!  TEN THOUSAND DOLLARS!

The next time you’re faced with the option of “saving” by opening a credit account in the checkout line of a retailer, think twice.  It may cost you far more in the long run.