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Not sure if you shop at the mall, but I know many times when I'm picking up something, the cashier always asks me if I want to open an account to save 10% or so on my purchase.

My policy is to decline the offer. Signing up for new accounts without looking at the details usually leads to problems down the line.

I decided to go ahead and look at the numbers and see if we can see if if retail store credit cards are a good deal or not. I also looked at ways to get some good discounts without resorting to a store card.

How Much Can 10% Really Save?

If you bought $200 worth of clothes, you're looking at saving $20. In the grand scheme of things, are you really saving money? Can you find another way to cut your costs when you're shopping?

If you want to save money at your favorite stores, you should check out Retail Me Not. It gives you coupon codes at many popular retail sites. I've saved 10%-40% on items that I wanted to buy.

You don't need to sign up for anything, you can just search for your store.

The same applies to the site Coupon Sherpa where you can find everything from store-specific pages (like JCPenney) to pages devoted to just grocery coupons.

Here are some stores that you can find some discounts for on Retail Me Not:

Retail Credit Cards vs Reward Credit Cards

If you're looking at using credit cards for your spending, then you may want to look at alternatives.
With retail credit cards, you only can use it for that store. To earn rewards, you have to buy things, which you probably don't need to do every month. As you're working towards getting out of debt and building your net worth, you'd rather reduce unnecessary spending until you reach your goals.

Reward credit cards can be used for a variety of purchases. Some people take advantage of cash back or point rewards by putting their monthly expenses on them and then paying off every month to avoid interest.
The advantage of that method is that you spend what you typically do, but you're earning a bit back with that. The catch is that you have to be alert to make sure that your payments are being received on time.

A benefit of reward cards is that you can choose what reward you'd like to get. Do you want cash back? Do you want airline miles or do you want points to decide your reward later?

Thoughts on Store Cards

How many of you have store cards? What are the perks and drawbacks of them?

Photo Credit: Wonderlane

About Elle Martinez

Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..

7 comments add your comment

  1. For me the drawback is twofold:

    1) Opening a new account will reduce my FICO score temporarily and may reduce my score in the long term as it lowers the average age of my accounts.
    2) The interest rates on those things are always like 29.99%! If I want to be robbed a 10% savings won’t do it for me, especially when it barely covers sales tax here. Not enough incentive. 25% and we’re talking.

    • I completely underneaths and thanks for bringing up the high interest rates associated with the cards.

  2. I have, on rare occasion, gone ahead with opening a store card to get the featured 10% off what I’m buying. My son used to wear a very specific type of jeans that I could only find (this was before online shopping made things a lot easier) at one store in our local mall. We went in one time and I was thrilled to see the jeans on sale and get the 10% discount on top of that by opening an account. So in that one instance, it made sense. I paid the invoice as soon as I received it in the mail, then stuck the card in a drawer and pretty much ignored it, eventually closing the account years later.

    For the most part, I much prefer to use rewards credit cards to make purchases, pay each cc off in full every month and get the rewards as cash or gift cards for stores where I shop anyway (like CVS or Walmart). I also agree that store cards have ridiculously high percentage rates if a balance is ever carried on them – not worth it!

  3. I agree, but there is at least one exception. Target offers a 5% rebate on purchases in their store without a time limit. If you are a regular customer of Target for household goods, this would make sense.

    • I also love the Target card and I have both the credit and debit cards. Both offer the 5% instant discount on most purchases. However, late fees and rejected payment fees are high ($29 to $35) on both cards, so be sure to setup auto-pay linked to a checking account that has an overdraft line of credit that only charges interest when used and no transfer fees (such as Electric Orange from ING Direct).

  4. For some situations it actually might make sense to get a store card. For example, you bought a new home and you are shopping for appliances which can run to atleast a thousand if not more.

    In this case, get a store card, get the 10% discount, pay in full and cancel the card.

    But for everything else, I agree, best to not take on additional debt.

  5. On new purchases I have to be saving a really good amount of money. You are right $20 isn’t worth the hassle!

    I’ll use the store card if I opened one up when I was younger (I think Macy’s always offers 10% off or something).