Should you open a store credit card? Consumer Reports has the answer! – News Channel 5 Nashville

NASHVILLE, Tenn. (WTVF) — Many of us shop online these days, but if you go into a department store or other big-box retailer in person, you'll probably get this question.

This isn't a paper or plastic question, it's something you receive at checkout, but would you like to open a store credit card? They often offer big savings on purchases you're about to make. .

But here's the thing…you should think twice before signing up for one of these cards.

“Generally, this is not a good idea. Sure, these upfront savings are very attractive, but if you don't pay off the balance before the promotional period ends, you'll end up paying a lot of interest. '' said Brian Vines of Consumer Reports.

The average credit card interest rate is around 20%, while retail and co-branded credit card interest rates are at an all-time high of 30%.

Some are even more expensive! TJX, JCPenny, QVC, and Walgreens credit cards are at almost 35%, and Burlington, Big Lots, and Michael's are at almost 36%.

And we know that about half of Americans carry a monthly balance. This can make you pay more money and affect your credit score.

So is now a good time to consider signing up for a store credit card?

“If you shop at that store frequently and are careful to pay off the balance each month or before the promotion ends,” Vines says.

Keep in mind that many store-brand cards have low spending limits, so if you spend a lot of days shopping for holiday gifts, you could end up maxing out your card.

Another thing to consider is that store brand credit cards may be easier to obtain than traditional credit cards.

So if you're looking to build your credit history, have a low balance, or commit to no balance, these can be a good option.

Want more information about this story? Email jennifer.kraus@newschannel5.com.