4 Reasons to Pay Off Store Credit Cards

Store credit cards can be tempting to a frequent shopper because they usually come with rewards and discounts for the people who hold them. They can also offer a significant financial boost by helping to establish or improve your personal credit score. Store credit cards also pose some risk to shoppers who hold them, though, so it’s important that you pay them off in a timely manner.

1. Paying Off Your Card Improves Credit

Need we say more? You don’t have to have a high credit score in order to be approved for a store credit card and getting approved for the card will increase your credit limit while driving down your utilization rate. But if you do not pay off your credit cards in a timely manner, you can further damage your credit card.

2. High Interest Rates

Store credit cards have notoriously high interest rates — the average APR for a store credit card is 23.23 percent. That’s 8% more than the typical credit card. That means that using a store credit card and failing to pay it off could result in some serious accrual of debt.

3. Low Limits

Store credit cards also typically have very low limits, which means that if you make frequent use of your store credit card you will need to be paying it off regularly. Paying off your credit card can keep you from reaching your credit limit and damaging your credit or getting into a situation where interest and debts accrued can present a financial burden.

4. Promotional Catches

Some stores offer enticing promotions in order to attract shoppers to their store credit card. For example, a store may offer a promotional period during which time interest rates do not apply. However it is often the case in these situations that if you do not pay off the balance before the end of the promotional period, you will be responsible not only for the balance but for regular interest rates as well.

Before taking on a store credit card, consider whether you will be able to be able to pay it off in a timely manner and if it can be helpful to you in improving or establishing your credit.

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Cain & Daniels, Inc.

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Cain & Daniels, Inc. specializes in the settlements of commercial business debts such as lawsuits, judgments and past dues. Located in Tampa, Florida.

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