Pay off credit card bills every month to avoid paying...

Pay off credit card bills every month to avoid paying high interest -- and accumulating debt. Credit: Getty Images / iStockphoto / Rawpixel Ltd

It’s that time of year when store clerks try to tempt you to open a credit card to get that extra discount on your purchase. Retailers also have sweetened the rewards pot. But it comes with a price.

According to a survey of 65 retail cards by, the average annual interest rate rose for the third consecutive time, to 24.99 percent. One card, BrandSource, charges 30.49 percent.

So, should you take the bait?

“If you can’t pay your balance off at the end of the month, retail credit cards aren’t for you. Period. The interest rates are just too high, and if you carry a balance, the math doesn’t work in your favor,” says Matt Schulz, senior industry analyst with

When is signing up smart? “If you pay your cards off in full every month. Stores often offer big discounts for the day you get the card, and that can make a big difference, especially during the holidays,” says Schulz.

However, you can get tripped up. The credit check when you apply for the card can lower your credit score. Rewards like in-store coupons often expire quickly, “so you may end up paying a high interest rate for savings you might never use,” says Chris Horymski, analyst with Then too, “If you only use the card once, unless you close the account, it could be a target of identity thieves.”

What’s a better alternative? Says Horymski, “Get a bank-issued card before you shop. If you have a balance at the end of the [introductory] 0-percent period, you won’t get slapped with the retroactive interest” that many retail cards charge.

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