Think at least twice before opening a store credit card

The black leather bag is a perfect Christmas gift for mom, though it costs a tad more than you budgeted. Ditto for the purple scarf for your sister. 

Just as you’re deciding whether to splurge, a salesperson approaches with an offer that seems to come from the retail gods: Apply for an immediate store credit card and save 10 percent on today’s purchases.

But take a breath, and read the fine print before deciding. And that goes for all the credit card offers stuffing your mailbox dangling a myriad of perks like airline miles, zero interest and cash back. Opening a new bonus-laden account during the holidays when some extra credit could make an extra-special holiday can be a good idea. Choosing wisely is key.

Don’t buy that purse with the store card unless you can pay it off at the end of the month. That’s because store credit cards’ interest rates average about 23 percent, while a typical bank card rate averages 15 percent, according to Matt Schulz, a senior industry analyst at Creditcards.com.

“That’s a significant difference, and the interest can override any discount if you can’t pay it off,” said Schulz.

Still, some sign-up rewards can help brighten the holidays. The Chase Freedom Card offers a $150 cash back bonus to new holders who spend $500 over three months. “If you know you’re going to spend $500, get it -- and then you never have to use it again,” said Schulz.

It’s important to consider what you buy and which dividends you’ll use when selecting a new card. An airline miles card may not make much sense now if the funds that you previously earmarked for exotic travel are now dedicated to a mortgage. What good is 5 percent cash back at gas stations if you don’t own a car?

Creditcards.com has a tool to help you compare and select cards as does NerdWallet.com and ConsumerReports.org. The sites have information on annual card costs, interest rates and various perks. 

You can find lots of options for no-fee cards, though don’t immediately dismiss the ones that require you to pay for privilege of stuffing the plastic rectangle in your wallet. The eye-popping $450 fee for the Chase Sapphire Reserve card may be a good deal if you’re a jetsetter. It comes with a $300 travel credit and $100 for the TSA Precheck program. Holders earn three points for every dollar spent on travel or dining, and you get a 100,000 point bonus for spending $4,000 in three months.

 “You need to know how the card fits into your life,” said Schulz.  

Zero interest rate cards that allow holders to pay back the cost of purchases over time without amassing fees can be especially tempting around the holidays. They help avoid what can be a nasty financial hangover in January and February.

Schulz said to comparison-shop for post-grace-period interest rates. Be careful that the card doesn’t charge you interest going back to the date of purchase for the entire cost of the item even though some of it has been paid off. That’s more common with store cards than bank cards, however.

Retailer Big Lots (BIG) offers its credit card holders who buy $250 worth of merchandise no interest for six months, a period that extends to a year if you charge $750 or more. But if you don’t pay it back on time, you’re hit with a 29.99 percent interest rate backdated to the time of purchase. That’s one big lump of coal.