You approach the register with your highly discounted items in one hand and the coupon you brought in the other hand. You’re feeling good about finding such fierce clothing at such great prices when the inevitable occurs . . . the gal at the register cheerfully suggests you open a credit card account with the store and receive an additional discount. If you’re like most people, this thought crosses your mind: “Well now, that sounds like a good idea.” But before you hop at the chance to grab yet another credit card you need to stop and quickly analyze what this nominal discount will actually do to your credit rating. Read on . . .
1. Opening a new credit account can be like adding another straw onto the metaphorical camel’s back. Stores want you to open a credit card because you’re more likely to spend more than if you were to spend with cash, and you might choose to shop at that particular store over a different store simply because the credit was extended to you. Not only is the store trying to get your money, but the store is also trying to make you a loyal shopper. Do you really need to add another credit card to your wallet’s arsenal?
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2. You should also realize that applying for a store credit card will absolutely affect your credit score, even if your application is denied. Having too many inquiries on your credit report makes you appear to be a perpetual credit hound, and this can lower your chances of eventually getting approved for a car loan or mortgage.
Think twice before indulging in spontaneous credit, Fashionistas. It’s just not a good move.
photo courtesy of freedigitalphotos.net
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