1 ) High Interest Rates – If you compare popular credit cards, you will see that store-branded credit cards have an average APR of about 24%, while for regular cards it is around 16%. More than that, the interest rate of store credit cards is standard for everyone. General credit cards tend to offer lower rates to those with good credit, and higher rates to people with bad credit.
2) Low Credit Limits – Credit limits on store cards tend to be low, which may not be good for your credit. It will make it easier to spend all available credit and that will increase your credit utilization ratio, which can lower your credit score. Regular credit cards usually have higher credit limits, and they depend on your creditworthiness. Plus, banks allow credit limit increases.
3) Restricted Use – A typical store credit card cannot be used anywhere outside the issuing store. When you do not want to be limited to one specific store, opt for a regular credit card. Those cards are designed for shopping and you can use them anywhere where credit cards are accepted.
4) Poor Promo Offers – Store-branded credit cards do not usually offer 0% intro APR and bonus rewards together on one card. You can get either special financing on specific products or a discount. Regular credit cards work differently. You can choose a card based on your preferences: 0% intro APR, rewards, or both.
5) Increased Spending – With store cards you may receive invitations to sales events or offers that can tempt you to overspend, which may increase your debt and lower your score. With general credit cards you will always earn rewards, so you won’t be tempted.