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Best way to avoid store credit card remorse: Don't get one

Buyer’s remorse sticks in your craw; it's even worse when the cost isn’t just a one-time loss.

When it comes to store credit cards, the pain can go and on. In a new survey, 75% of those polled have had a store credit and 50% of them regretted it.

There’s a good reason to have a long face. The average APR was a hefty 24.97%, and 88% of “special financing” offers come with a big catch: deferred interest.

While that 15-20% off your purchase when you open a store card may be tempting, think beyond the moment. The problems go beyond the sky-high interest rates. Here’s why store credit cards are generally not a good idea.

Negative impact on your credit score

“The biggest drawback with store-affiliated credit cards is they cause more harm than good on your credit score. The credit limit on these products is generally low, which in turn can end up hurting your credit utilization ratio,” says Chelsea Hudson, a credit card expert for

Putting other credit cards aside, if you have a $1,000 credit limit on your store credit card but owe $300, you're utilizing 30 percent of your credit. Most experts recommend you shouldn’t use more than 30% of your credit limit on any one card. Moreover, each card application will also generate a hard inquiry on your credit report, she says.

There are better options

“The benefits of a cash-back card may be similar to, or better than, those of store cards,” says Freddie Huynh, vice president of credit risk analytics with Freedom Financial Network in San Mateo, California.

Getting cash back means you can use that cash for many purchases at many stores — versus just one with a retail store card. If you’re interested in accumulating rewards points, or other perks, carefully check against other programs to get the best deal.

Also, you often can get the same perks offered with a store card — such as promotions, coupons, and sale notices — without the card.

Sometimes, you can receive the same benefits a card offers by simply getting on the store’s list to receive email or snail-mail info.

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