It seems like every time I go shopping these days a salesperson tries to get me to open up a credit card with their store–the ones that promise a discount on your purchase. What is the deal with them? Someone told me that these credit cards affect your credit score.
Someone was right! Those salespeople are whack! An in-store application for credit can actually hurt your credit worse than if you apply for a credit card through the mail or online, because it looks like you are desperate for money. To the three credit bureaus¬–Equifax, Transunion, and Experian–banks that offer in-store credit are considered lenders of last resort. Unlike a credit card that you can apply for at your local bank or credit union, an in-store application sends the message that you don’t have enough money or pre-existing credit to make your purchase. So in the moment, while it may seem like a good idea to sign up to save a few dollars today, it could actually have a big impact on your credit score tomorrow. You probably don’t really need a new credit card anyway. That reminds me, I never got that free vacation to Mars that the outlet store promised me if I signed up for their card…Ugh, they got me too!