A clothing store credit card can have many benefits, but potential dangers should not be ignored. This type of credit card can improve one's credit rating if the bill is paid on time, but the interest rate is often higher than that of traditional credit cards. Members-only discounts and reward programs might be available, but they might end after a few months or encourage the cardholder to spend beyond his or her means. A person should consider his or her current financial situation, as well as where he or she expects to be 12 months later, before committing to a clothing store credit card that offers deferred payment options.
Many consumers consider a clothing store credit card to be a good starter credit card. For someone who has no financial credit, store cards can help him or her increase his or her credit score and establish a credit history. This is important if he or she wants to get a car loan, house or apartment one day. One should make sure that the monthly payments are affordable before applying for a credit card, or his or her credit rating might be destroyed before it even had a chance to be built up.
The clothing store credit card application should be read carefully so that the interest rate is understood completely. Store credit cards are notorious for having higher interest rates than traditional cards from banks and credit unions. One should pay particular attention to fluctuating interest rates or rates that increase after the first 12 months. Some clothing store credit cards offer deferred payment options with no interest, but customers end up accruing interest for the entire time if the balance is not paid in full after the grace period. The applicant also should find out what kind of protection the card offers against fraud.
Discounts, reward programs and exclusive coupons are one of the biggest perks of store credit cards. Frugal shoppers can take advantage of these deals by paying their bill immediately after each purchase or by the end of the monthly billing cycle. Many stores allow card holders to pay their bill at the customer service area or registers, eliminating the threat of high interest rates and a higher monthly statement than was anticipated. It is important for consumers to make a budget and stick to it, because special discounts cause some shoppers to spend money that they would not have spent under normal circumstances.