Totals add up quickly when shopping for your back-to-school wardrobe. So, when the store clerk tallies up your purchases for a grand total of $1,000, the offer of 10 percent off if you charge it to a store credit card may sound great to you. That’s $100 off, after all.
Keep in mind, though, retail credit cards generally come with rates over 20 percent. So, if you carry a balance, your finance charges will quickly wipe out the $100 you saved. For example, let’s say the card charges 21 percent and you’re making the minimum payment of, say, 4 percent each month. Within six months, you’ll have paid $99.28 in interest, according to Yahoo Finance.
Besides that, your credit score will take a hit with every credit application. If you do it at several stores, the multiple cards can really erode your rating.
Better, shop over several paydays and pay cash. Or, use one low-interest credit card, like a TFCU Visa or MasterCard, and pay off your balance as quickly as possible.