Those hit hard by the cruel reality of the US economic crisis may be wise to work on improving their credit scores. Credit scores are a formula based on consumer behaviors and are the ultimate tool for gauging one's financial health. One key move to help improve one's credit score is to avoid securing and using store credit cards.
Usually cards issued directly from a retailer come with an enticing discount offer to be applied towards the first purchase. But for those with a less than spotless credit history, the negative points of a store credit card outweigh the benefits of the initial savings.
When one applies and secures a retail credit score they may risk jeopardizing their credit utilization ratio. Store credit cards tend to offer individuals lines of credit very close to the purchase price of the items. Creditors require that consumers have substantially more credit then they are using at any given time, retail credit cards do not work that way.
Other disadvantages to retail credit cards are that they charge substantially higher interest rates than regular credit cards. Plus the cards can only be used at that specific retailer. These rules should make these types of cards less appealing to consumers.
It's not to say that there aren't advantages to retail credit cards. If you are loyal to a particular store or brand, by having their credit card can be rewarded with discount coupons, insider sale information and other perks. Additionally, store credit cards are a great way to start building a credit history. However, choose which cards you will use wisely as the affects to one's credit score are not worth the perks if you do not take advantage of them.
