Opening a store credit card to get a discount can definitely save you money immediately. After all the store is offering a ten or 20% discount to you simply for opening a new credit card account. There is nothing wrong with this in terms of saving money provided that you can always repay the balance of the card when you receive your statement.
The store is hoping you will not be able to and will begin charging interest on the overdue balance often at a rate that is around 30% which is higher than most credit cards from banks. This is really how the store makes a profit and a rather large profit at that. Any time you can charge 30% on a balance means high profits. So pay off your credit card as soon as the monthly statement arrives!
Opening a store credit card to get a discount – Will You Use It
One of the issues with these incentives is that many people will buy something that is on sale because it is on sale. They actually do not need the item and would not have purchased it if they had not seen it on sale. You are not saving any money at all if you incur interest charges and you do not actually use the item once you get it home!
Another factor to consider is your credit rating. Adding multiple credit cards to you credit rating will over time decrease your credit rating. When this occurs and you need to borrow money for a loan for a car or perhaps your mortgage, it could mean that you will be unable to secure a loan or mortgage and / or pay higher interest rates which ends up costing your money than you should be paying. Any money you saved with the initial purchase will be long gone with high interest rates, paying interest or not being able to borrow money at low interest rates.
Opening a store credit card to get a discount can be a good thing, but like everything else in life needs to be managed to ensure that it does not cost you money in the long run.