Ask Mo!

The Question

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.

Our Answer

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!

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