Pay a store card’s balance in full by the first due date, and its checkout discount is yours to keep. If you’d carry the purchase instead, a year of interest at the card’s rate, often above 30%, can cost as much as the discount saves. That’s still cheaper than carrying it on a typical credit card.
Say the clerk offers 15% off a $600 TV if you open the store’s card today. That’s $90 off. But pay off the remaining $510 in 12 equal monthly payments at a 30% annual percentage rate (APR), and by our math the interest comes to about $87.
That leaves you about $3 ahead of paying $600 up front. If you’d carry the TV either way, the store card is still cheaper than a general-purpose card, at the cost of a hard inquiry on your credit report. Those averaged a 25% APR in 2024, the Consumer Financial Protection Bureau (CFPB) found. By our math, 12 payments on $600 at that rate cost about $84 in interest, so the store card comes out about $88 ahead. Store-only cards averaged 31%, and many charge every cardholder the same rate, so strong credit won’t get you a lower one.
FICO says a hard inquiry takes less than five points off most people’s scores and stops counting after a year. If your credit is strong, a store-only card’s starting limit is typically less than half what a general-purpose card would give you, the CFPB found. So the same $510 balance takes up a bigger share of the limit. That raises your credit utilization, which can lower your score until you pay it down.
After the first purchase, the card is worth using only if you shop there constantly and pay it in full every month. If you shop there only now and then, a no-annual-fee card that earns 2% back on everything you buy is the better everyday card. For the store’s rewards, ask whether it also offers a co-branded card, which many big retailers do. It carries the store’s name but works at other stores too.
Financing that’s interest-free only if you pay in full by a deadline is deferred interest, a different deal with risks of its own.
Take the discount only on something you came to buy, and pay the card off before you charge anything else to it.
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