When you’re out shopping this holiday season (or really any time of year), you’ll probably be asked if you would like to sign up for a store card. With offers like no down payments and no interest for a certain amount of time, a store card might sound like a great idea — but not so fast!
Before you sign up, you need to make sure you know what you’re getting into!
What to know about store credit cards
You may get what looks like a big discount on your purchase when you use a store card, but when those sign-up benefits stop and the interest kicks in, it can end up costing you big time!
According to a report from CreditCards.com, the average store credit card carries a 23% interest rate — compared with an average interest rate of 15% for all credit cards. Some store cards carry rates as high as 29%.
So if you’re someone who only makes the monthly payments, you might want to reconsider applying for a store card.
However, there is one store card that is an exception to the rest. The Target RED card gives you 5% off all your purchases and free shipping on most orders from the Target website.