If you’ve ever considered getting a credit card at your favorite shopping spot, you’ve probably had a lot of questions. Are they really worth it? What are some of the ramifications to missed payments or outstanding balances? We’ve done some research for you so you can decide for yourself if it’s worth trying.

A Store Card Is A Way To Promote Brand Loyalty

This really goes without saying; a store wants you to open a credit card with them to encourage you to only spend on their brand. They’ll offer incentives like cash back or store rewards and coupons.

When you get caught in brand loyalty, you’ll often find that you price shop less. With your credit card already linked to your favorite store, you likely won’t even attempt to look elsewhere for a better price, which can end up costing you more in the end.

The important question to ask before opening a store card is how often do I really shop here? If you only visit a few times every couple of months, you might not want to open a card. If you’re a more regular shopper, a card might be a good idea as long as you keep your balances low and meet your payments on time.

Many Cards Offer Store Discounts

We all love a good sale. That 20% off can go a long way on big purchases, and with a store credit card, you often have better discounts than a non-cardholder. Many companies send out member specific emails and promotions you wouldn’t have access to otherwise.

In addition to coupons and sales, you may also be entitled to early access to sale items or a points system towards free merchandise. Many retailers offer online shopping as well, where you can utilize your store card for further discounts or even free shipping.

A Store Card Frees Up Other Lines Of Credit

It’s likely that many of your credit card purchases end up being retail purchases anyway, so opening a store-specific card is a good way to centralize your spending in one place. If you’re a frequent buyer, you won’t need two or three lines of credit open any longer. One store card should meet your spending needs for retail purchases.

By freeing up lines of credit, you can concentrate your spending in one place, and pay down your other balances. If you need to make a big purchase, this can be especially useful. Perhaps you need a new appliance or flat screen TV. A store credit card is perfect for this kind of purchase.

Nordstrom is a fashion company that offers a highly rated credit card option and some of the best interest rates you can get. For every dollar you spend, you get twice the points. You can read the Nordstrom credit card benefits here.

Store Cards Can Have High APR

Your annual percentage rate or APR is how much interest you’ll pay on the purchases you make with your card. Most credit card companies charge anywhere from 19-26%, often based on your credit score. Most store credit cards will have an APR of 20 or higher, meaning a 20% interest rate on your card balance.

The low spending limits store cards typically have can mean that your purchases add up quickly. It’s important to keep track of what you’re buying so you don’t accidentally max out the card. Interest can add up quickly with a high principal balance.

Store Cards Can Be Great For Building Credit

If you’re just starting out on your credit score journey, or simply trying to repair a poor credit score, a store card may be just the thing to set you up right. You can make one or two big purchases (without maxing out the card, of course) and pay them down entirely before making any others.

This is a good way to build up credit, while keeping your spending under control. Maybe there’s a laptop you’ve always wanted. You can buy it with the store card, leave the card at home, and pay off the laptop before you make further purchases.

Creditors like to see that you don’t max out limits, pay minimum amounts every month, or make late payments. Keeping your purchases within your monthly limit is absolutely crucial to a well managed financial plan.

So, Is It Really Worth It?

To answer this question, it’s really important to decide what you’re expecting from your store card, and what you’re capable of paying back.

If you’re not making enough to meet the basic needs of your household, a credit card is probably not a good option. If you’re looking to build credit and centralize spending, however, this may be a great choice for you.

Store cards promote brand loyalty and usually have higher APR, but offer discounts on purchases. If you choose a retailer like a department store where you can get groceries, clothes, electronics, and other household items, you’ll be saving on everything you buy for your house.

If you decide you want a store card, be sure to read all of the fine print on the terms and conditions. Be aware of the ramifications of missed or late payments, what your credit limit is, and the interest rates. Never borrow money without reading the fine print, as surprises in your card statement are often difficult to navigate and can end up costing you more money in the end.