Need a fresh start on your credit? Having trouble rebuilding your credit after you’ve suffered a serious financial setback? Maybe you haven’t ever really had any credit but want to start building your credit score for the future? While store credit cards may not provide the same flexibility as traditional credit cards, they are usually a pretty good option if you’re trying to build or rebuild your credit score, but before you sign up for just any store credit card, make sure you study the fine print.
Here are a few things to look for with store / catalog shopping cards:
- Credit limit – Many store credit cards start out with a low credit limit, but over time and with a good payment history, your credit limit will typically increase. You can actually use these increases over time as they will increase your available credit, and may increase your credit score, as well. (Just remember to keep your credit utilization under the 30% recommended by the credit bureaus.)
- Interest rates – Some store credit cards will have a higher interest rate than the national averages, however, if you’ll be utilizing the card to rebuild your credit score, this may not be a big factor, especially if you plan to pay in full on a monthly basis.
- Limited usage – Most store credit cards are limited to the store or catalog shopping site that is extending the credit to you. Again, if you’re utilizing the credit to rebuild your score, this isn’t a factor. The important thing is to get the available credit onto your credit report.
Choosing the right store/catalog credit card can make it much easier to get that fresh start on your credit, but there’s more to it than just signup up for the first store/catalog card you run across – always consider your options carefully, make your purchases carefully, and have a plan to pay back anything that you charge.