Think you'll save with a store credit card? Here's what to know first
BOSTON - As you head out to shop for the holidays, some stores may offer you a discount for signing up for their credit cards.
For example, a clerk might tell you can save 20-percent on your purchase if you just sign up for their card.
If you tend to carry a balance on your credit cards, an expert told WBZ-TV, don't do it.
"There are a few good times to sign up for retail cards. First, would be if you're able to pay in full and avoid interest, I feel like that's a necessity for making these work," said Ted Rossman a Senior Industry Analyst at Bankrate.
"Beyond that, if you're loyal to the store, and if you can pay the card off right away, then I think it could make sense, because stores like Amazon and Target and Best Buy, they have retail cards that give 5% back when you use their card at their store, and that's probably better than you would get on any other card."
The average store-only credit card charges an annual percentage rate (APR) of 30.24%.
The average co-branded credit card charges a 27.64% APR and according to Bankrate's annual retail cards study, the national average for all credit cards is 20.72%.
You should also watch out for deferred interest. That's when zero-percent interest is offered for a certain amount of time, but your balance has to be paid in full by the end of the term or you will be charged all of the interest that would have been building up from the start.
If you can, stick to cash or debit cards for your holiday spending.