I Thought Opening a Store Credit Card Was a Scam. I Was Wrong.

By Stephen Sellner | Citizens Bank Staff

I went shopping for new clothes recently. Once I laid down all my sweet new button-downs on the counter at checkout, the friendly store clerk asked me an all-too-familiar question.

Do you want to open a card with us?

Here we go again, I thought. In the past, I’ve balked at these offers, thinking that somehow they had to backfire on people in the future. As a result, I told the woman that no, unfortunately I didn’t have a store credit card and that I wasn’t interested in opening a credit card today.

To her credit (no pun intended), she asked one more time.

Are you sure? If you open a card today, you’ll get 20% off your purchase today and 10% off future purchases.

Now she had my attention. Saving 20% off my purchase was definitely enough reason to consider it, but again, I got defensive. Why would this store offer me 20% off just for opening a credit card with them?

I caved and opened the card. And I’m glad I did.

• Related: Which Credit Card Should You Get?

Turns out, I was wrong about store credit cards all along. When used responsibly, they’re not too good to be true. They’re just … good.

Store credit cards typically offer discounts on all purchases, so the savings don’t stop once you open the card.

Store credit card tips

Store credit cards are a great way to score big-time savings at your favorite stores. Plus, they provide financing flexibility rather than having to pay with a debit card. In some cases, you can even get free shipping on all online orders.

Use these five tips to get the most out of these store credit cards:

1. Don’t feel like you need to shop at that store all the time: You don’t have to use your store credit cards every month to make them worth it. It’s OK if you only use them a few times a year. Now, it’s recommended that you use some form of credit every month, but that can be for your primary credit card, not your store ones. Speaking of which…
2. They’re better as a secondary credit card: Generally speaking, store credit cards have low credit limits. That restricts how much you can charge on it to maintain a good credit utilization of 30% or lower. If it’s your only card and the credit limit is $500, that means you’d need to keep your balance at or below $150 to not hurt your credit score.
3. Open them in moderation: Like most things, store credit cards are good in moderation. Every time you open one, your credit will be pulled, which temporarily drops your credit score. That’s usually nothing to sweat, but applying for a bunch of cards in a short timeframe could compound the impact on your credit. Plus, having too many credit cards could jeopardize your ability to get approved for others down the road.
4. It’s OK to close the card after a while: The upfront discount for opening these credit cards can save you good money. So if you’re making a purchase at a store you never expect to go to again or rarely visit, you could open the credit card, get the discount, pay off the balance, and close the card a few months down the road.
5. Make full payments: Store credit cards tend to have higher interest rates, so you’ll want to make sure you pay off your balance in full each month.

What to remember

Store credit cards aren’t too good to be true. When used responsibly, they’re a great way to score savings on purchases, especially if the store offers a big discount on your purchase for opening the credit card. Just make sure you open these cards in moderation, use them as secondary credit cards, and adopt other best practices.

So, the next time you’re asked if you'd like to open a store credit card, you can proceed with confidence.

• Related: How Do Cash-Back Credit Cards Work?

More information

Looking to open a primary credit card? The Citizens Bank Cash Back Plus® World Mastercard® offers 1.8% cash back on everything. Yes, everything.