Store Rewards and Promotions

Store credit cards offer immediate savings, but what are they doing to your credit score in the long run?

Q: My wife and I have a number of store credit cards. How bad can they be on our credit score?

Store credit cards can be extremely tempting, especially if it’s for an establishment that you frequent. And the truth is that there are a number of pros and cons to signing up for them. Unfortunately the pros are more immediate — “sign up today and get an additional 15% off your total purchase” — but the truth is that the cons might be more long lasting and detrimental. And if you already have the cards, you might as well keep them, but stay away from signing up for any new ones.


Some store credit cards have special coupons or sales only available to cardholders. According to, some cards that bear American Express, Discover, MasterCard or Visa logos could allow you redeem points earned by spending at the stores for other things (like airline tickets). So if it’s a store you shop at frequently, you might reap serious rewards from your store credit card.

But, the cons are pretty difficult to ignore. One of the biggest issues is that they often have high interest rates (like in the double digits), so you better make sure you pay off your balance quickly.

And, of course, signing up for a store credit card will lower your credit score because it triggers a “hard inquiry” on your credit report, according to Within the year you applied, that hard inquiry can affect you if you apply for, say, a loan.

If you aren’t worried about applying for any loans, you pay your balances every month and the promotions are for a store you frequent enough to be worth it, then store credit cards can be great. Initially signing up for the card can hurt you because of the inquiry, but after that, they become regular credit cards that you pay off every month and help to build your credit history.

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