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March 05, 2008

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That's pretty much our practice -- we'll open up the new credit-card account to get the discount only if we are making a big-ticket purchase. We'll sometimes do the same to get no interest, if it's for a long-enough period of time. (That's essentially a discount if you have the money in hand, since you'll earn interest on it.) And of course, we pay it off whenever it comes due as needed to avoid any interest or charges.

My belief is that your credit score gets hurt if you are always opening up new lines of credit. But otherwise, I think it's not a simple equation. Over time, we have accumulated a number of store credit-card accounts; and our credit scores (at last check) were in the 790s.

But I agree that it's not worth the hassle or risk if you are about to go in for a new mortgage! Best of luck....

Never had one, never will. My wife has tried canceling her Victoria's Secret card three times and it still shows as "open" on her credit report. They are more hassle than they're worth and it seems like every store has their own card now. I don't even like being asked to open a card anymore they do it so frequently.

I can't stand store credit cards. Hate 'em. My wife has a Macy's and Bloomingdale's card and although I live with it, I am not a fan. It lowers your credit, and the store interest rates are very high. It's another hassle to have to pay these cards (i.e., create a new account, log on online, etc.) and whatever savings you get in the beginning by applying for the card are very very short lived.

Kevin --

Your wife has a Victoria's Secret card?

Fighting...myself...not...to...make...a...comment...

You're a lucky man. :-)

So I lost the fight...

I have heard several times that store lines of credit are actually counted differently on your credit report and are more harmful. I have no idea if this is true or not, but I already have a Visa and a Mastercard that give me rewards. I don't need another.

I recently opened two different store credit cards - Macys and Sears, both to make large purchases. The 10-20% off makes a big difference with large purchases and since I pay off all my credit cards monthly the interest rates weren't a consideration.

I'll be closing the Sears card shortly, but the Macys card came with a reward program that looks like it might be good to have during their big sales. I think as long as you don't go crazy with them, store cards can be good when used as a tool for saving money and getting access to 'exclusive' coupons and sales.

My wife and I have a few store credit cards and it apparently hasn't affected our scores. Let's see: Lowe's and Best Buy for me; JC Penney and Kohl's for my wife. The only reason I have mine is to take advantage of occasional credit offers on large purchases, such as buying a washing machine for 0% interest at Lowe's when I already have the money to pay it off immediately. I haven't stepped foot in Best Buy in a year, so I should probably close it, but the others are very useful especially since we pay them off every month when we do use them.

FMF - no comment. I think she got it in college. It actually surprised me that she had one since she's not really the type to pay those prices. There are always sales though...

This topic got me to thinking. I have been pretty active in signing up for email coupons from various restaurants, etc. In fact, the other day I wanted to go to Quizno's, so I went on their website, signed up for their email and I immediately had a coupon emailed to me for a free soda & chips. My wife and I routinely get buy 1, get 1 free coupons and eat out pretty cheaply because of it. Other places I use are Qdoba and Papa John's pizza, for example. Our local McDonald's website usually has good coupons also.

Only worth it if (a) you have the cash in hand and (b) it's a big enough item that the discount is significant. The last time I did it was when I was buying a couple of suits for work, so that 10% was something like $60. But a lot of these store cards are serviced by a very shady company (whose name escapes me at the moment--something like WFNB) which, I hear, is quite dedicated to screwing you in all the typical credit card ways...I wouldn't even want to keep that account open afterwards.

You know, when I was younger and less informed about what having a credit card meant, I signed up for a Kohl's card to take advantage of the "bonus 10% off" one day. Curiously enough, I didn't get my 10%. But, I've had the card for nearly 5 years now, and when I do make a purchase at Kohl's (about 2-3 times a year), it's nice to have it so I can take advantage of their extra discounts from time to time.

As it stands now, I have two store cards--Kohl's and Best Buy. I keep the Best Buy card because I buy enough there that I periodically take advantage of their 90-days or 6-months SAC financing (depending on the sticker price of the item). It's nice to have 3 (or 6) months to pay the same amount as I would in cash, while letting my money still earn interest in the bank. It's not much interest, but it still beats having to pay interest or letting go of all my cash immediately.

Oh--and as soon as I get the bill, I set up automatic payments to ensure I don't get slapped with back interest :) This strategy has worked out pretty nice for me in the last several years.

I've always despised store credit cards and vowed to never get one myself. However, while at Kohl's we had to buy a bunch of new clothes for work, as well as 2 new winter coats. The total was about $400. That day, we could get 20% off if we applied for a card, plus I had a coupon for another 20% off.

I broke down and applied for a card so we could save the total $150 or so on the purchase. However, when they asked for my personal info, I told the cashier I would type it in. I leaned over the counter and typed in the SSN, phone number and address for myself and my wife quickly so that no one else would see the information. I surely wouldn't blurt out this information in public either, just like you.

Don't like 'em, never apply for 'em. Fifteen years ago, when we built our house, we did open a Sears charge to get the 20% off of our stove/refrigerator purchase. It was fine, but I honestly don't think I'd do it again.

Of course, I rarely shop at bricks and mortar stores anymore.

I sign up for store credit cards quite often. Always to save 15% or get 6-12 months same as cash (and put the money in a savings account to earn interest during this time). Once I opened a new store credit card simply to save $6. Yep, that was it. But it's really worth it. It took about 5 minutes to apply for the card, 5 minutes to pay it off, and 5 minutes to close it the next month. All in all, 15 minutes to save $6. Not too shabby of an hourly wage.

Often times, you can get the benefit of your own rewards card as well as save the 15% by opening a new account. I once opened a new store card, saving 15% of the purchase price, put $20 of the significant purchase on it, and put the remainder on my rewards card. I then paid the $20 the next month and closed the card. I ended up getting both benefits from the same purchase.

Sure it hurts my credit score a little bit, but I'm at the point now that I don't care. I already have good rates on my mortgage, and I have no other debt. I don't plan on opening any significant lines of credit, so a lower credit score doesn't hurt me. Rather, I use my credit score as an asset, making it work for me, and saving money on these kinds of deals.

It's not worth the time to open a new account if the reward is less than $100...

I'm sure it takes much more than 5 minutes to close the account (press 1, then press 2, then press 3, then 10 minutes... so on).

The one card I'm glad my wife and I got was the Gap card (can be used at Gap, Old Navy, Banana Republic & outlets). First we got 20% off, then they send us coupons every month for 10-20% off, then they send us a $10 gift card for every $200 spent (equivalent to 5% back). No annual fees and we pay it off every month. We shop there pretty often anyways.

We got a Pier 1 card because we bought our table there and it saved us 10% ($160). We figured it was worth it. Plus, the store was empty so there wasn't anyone else around to grab her information.

I also got a Pier 1 card when I was buying a dresser and some nightstands. The cashier had me fill out the info on the paper application, typed it in and handed me the app to shred when I got home. It only took a couple minutes to close a few weeks later when I got the bill. Really painless and I would do it again.

Certain stores, like Kohl's and Boscov's, have discounts regularly of 15% or more (Boscov's doubles the discount, which is a random amount, and can go to 100%, which I've seen) only for those who charge it with their store card. Sears has a 10% discount for card holders on occasion. These discounts make Kohl's and Boscov's store cards very valuable.

I have hereby vowed to not open any more store credit accounts. If it is someone's birthday or a special event and I am tight on cash, it is too tempting to walk in and purchase something I can't afford.

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