Retail credit cards certainly have their share of advantages and disadvantages, so what might be right for one consumer may not be right for another.

Let’s compare the two:

Advantages of Retail Credit Cards

• Instant approval – There is nothing like being able to purchase items from your favorite retailer when they are able to approve you in just minutes.
• Instant discount – Many retailers offer customers additional incentives for applying for instant store credit by discounting the day’s purchases.
• Future coupons/discounts – Many retailers, in an attempt to lure their customers back into the store send them coupons in the mail, usually along with their statement.
• Special promotions/events for card holders – Another ploy of retailers to get their credit card holders back into the store is to offer card holder-only promotions and events.

Disadvantages of Retail Credit Cards

• High interest rates – It is important to realize that, along with the convenience, comes high interest rates. Over-the-limit fees and late-payment fees for retail credit cards can be quite high, as well.
• More credit – do you need it? – The real question when deciding upon a retail credit card is, “Do I really need another credit card?” For many consumers, a standard credit card with a low interest rate may be a much better option than opening yet another credit account.
• Impulse buys/overspending – Perhaps the biggest reason that many consumers avoid retail credit cards is that they often encourage impulse buying and overspending, Sometimes it is all a bit too tempting to walk into a retailer and buy more than we need, simply because we come armed with our store credit card. Consider whether you can make responsible purchases with a retail credit card before applying for one.