Avoid Department-Store Credit Cards
Department stores are always trying to entice you to open an account. The sales clerks are trained to push these offers, which usually include 10 to 20 percent off your current purchase. “It's easy,” they say, cajoling you into what is ultimately not a good idea. Department stores are notorious for charging high interest rates on their credit cards.
Any time you opt to apply for a credit card to save 10 to 20 percent on your current purchase, you are setting yourself up for exorbitant interest rates that will soon result in your paying more than you saved. What the stores don't tell you is that they may boost your interest rate 15 to 25 percent within months, which means any balances will cost you far, far more than you saved initially. Plus, an excess of department store credit cards on your credit report may diminish your credit worthiness.
Only opt to hold credit cards at stores you frequent often, and limit your choices to two or three at most. If you cannot pay cash or use your debit card, you're better off paying with a bank credit card. Remember: Just say no to department store credit card offers.
Alert
If you think your government is protecting you, think again. In 1996, the U.S. Supreme Court lifted restrictions on credit card companies, allowing them to ding you whatever they want as a late fee (around $29 presently). Also, if you default on any credit account, universal default now permits any credit card company to brand you a high risk and raise your interest rates accordingly.
