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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