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Established Contributor
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Registered: ‎12-19-2008
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Re: I need a store card...


pattycake wrote:

plasticman wrote:

pattycake wrote:

I think a store card can be useful for someone rebuilding/building credit, since most have no AF.  I'm going to have my soon to be 18 year old son apply for a store card at Dillard's, just to show he can be responsible on his own.  He's been an AU on my cards for several years, but he needs to learn good credit habits on his own.

 

Then, when he is ready, he can app for a VISA with UFCU.  


+1

 

No question a store or gas card will help in this instance. They seem to be easier to qualify for. Nevertheless, my belief that a regular VISA or MC, if one can qualify, will accomplish the same goal and may actually be better, for FICO scoring purposes, if the CC is a major bankcard.

Message Edited by plasticman on 09-07-2009 10:00 AM

 

I agree with you, but there's always that pesky AF when you are in the subprime category.  I remember those, and not fondly!  :smileyhappy:

LOL...The CCCs may be revisiting the AF on many cards in the near future even the prime ones!:smileysad:

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Sparkz1920
Posts: 271
Registered: ‎08-09-2009
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Re: I need a store card...

Yeah, i never heard that either. I doubt it makes anything better or worse as far as FICO scoring.

 

I just want store cards for the perks, thats it. Thats why i dont apply for what i dont use

 

Except Penny's, i dont use it and dont shop there. Figured since i dont shop there, no more cards from places i wont utilize my credit line.


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txjohn
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Re: I need a store card...

I too believe that there is little value in a store card, as part of mix.  I personally believe that the benefits some have seen (score increase) after obtaining a store card would have been the same if they had gotten a major bank card in lieu at that time.

 

But, store cards can play a good builder stepping stone, especially if you have one you actually shop and can get the various benefits, discounts, offers, coupons.

 

Another benefit of store cards are the major purchase NO INTEREST offers that can come with them.  I ended up getting Rooms to Go and CareCredit because both offered NO INTEREST on purchases that I planned or needed to make anyway.  Room to Go was no interest till 2013 and CareCredit 18 and 24 months.  This represented a substantial amount of money in purchase that can continue to collect interest for me while I make the payments over time.

 

One other possible small benefit of some store cards is the "prime" or national issuer potential.  CU's and small banks tend to not get the full benefit as say a prime or national CCC.  It has been argued that certain store cards, such as Macy's, Sears and others get this "NATIONAL" account benefit that a CU card would not.  So if the major card being obtained is CU vs. a National store card......MAYBE there could be a hair splitting difference if the person needed MORE credit TL's to obtain optimum benefits of number of TL's, mix, etc.  But I still don't believe this to be enough difference to warrant any real concern or special action.

 

 

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beamMEup
Posts: 4,470
Registered: ‎12-31-2008
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Re: I need a store card...


txjohn wrote:

One other possible small benefit of some store cards is the "prime" or national issuer potential.  CU's and small banks tend to not get the full benefit as say a prime or national CCC.  It has been argued that certain store cards, such as Macy's, Sears and others get this "NATIONAL" account benefit that a CU card would not.  So if the major card being obtained is CU vs. a National store card......MAYBE there could be a hair splitting difference if the person needed MORE credit TL's to obtain optimum benefits of number of TL's, mix, etc.  But I still don't believe this to be enough difference to warrant any real concern or special action.


The FICO hit is "Too few bank revolving accounts"

CU accounts don't meet these criteria, neither do national merchant cards i.e. Macy's or Sears.

To avoid losing points here, you must have one bank (or national credit card meaning CapOne, AmEx, Discover - not co-branded but direct from those companies [these guys are actually national banks] to you).

 

That's one of the reasons HSBC (or other various favorites) is a good rebuilder card - it's score-building to have at least one "bank" card.  For FICO scoring purposes, there is no benefit to a store or merchant card per se.

Just puttin' syrup on something, don't make it pancakes.
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creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009
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Re: I need a store card...


beamMEup wrote:

txjohn wrote:

One other possible small benefit of some store cards is the "prime" or national issuer potential.  CU's and small banks tend to not get the full benefit as say a prime or national CCC.  It has been argued that certain store cards, such as Macy's, Sears and others get this "NATIONAL" account benefit that a CU card would not.  So if the major card being obtained is CU vs. a National store card......MAYBE there could be a hair splitting difference if the person needed MORE credit TL's to obtain optimum benefits of number of TL's, mix, etc.  But I still don't believe this to be enough difference to warrant any real concern or special action.


The FICO hit is "Too few bank revolving accounts"

CU accounts don't meet these criteria, neither do national merchant cards i.e. Macy's or Sears.

To avoid losing points here, you must have one bank (or national credit card meaning CapOne, AmEx, Discover - not co-branded but direct from those companies [these guys are actually national banks] to you).

 

That's one of the reasons HSBC (or other various favorites) is a good rebuilder card - it's score-building to have at least one "bank" card.  For FICO scoring purposes, there is no benefit to a store or merchant card per se.


An HSBC Discover, a BofA Amex and a Citi Amex are all co-branded cards that count as major bank cards.

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Sparkz1920
Posts: 271
Registered: ‎08-09-2009
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Re: I need a store card...

+1

 

My report specifically stated that my score was not high enough because no major CC's. Those are the ones that matter

 

But a store can get you to the cards such as the majors


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Scamp
Posts: 2,791
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Re: I need a store card...

An informative previous thread in which the store/retail/gas card scoring benefit (or lack thereof) was discussed at length:

 

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=162058&view=by_date_as...

 

The general consensus among our scoring guru mods seems to be that, while there may not be a 'ding' (nor a ding message that shows up on one's report) for not having at least one such card in one's credit profile, there does appear to be a score benefit from adding one of these cards to one's profile, as many who've obtained their first of such cards have reported a bigger-than-expected score increase as a result.

 

 

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beamMEup
Posts: 4,470
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Re: I need a store card...


creditwherecreditisdue wrote:

An HSBC Discover, a BofA Amex and a Citi Amex are all co-branded cards that count as major bank cards.


That's right.  That's because HSBC, BofA and Citi are all major banks.  A co-branded Macy's Visa (or a Wal-Mart Discover) does not qualify as a major bank card.

Just puttin' syrup on something, don't make it pancakes.
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creditwherecreditisdue
Posts: 4,923
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Re: I need a store card...


beamMEup wrote:

creditwherecreditisdue wrote:

An HSBC Discover, a BofA Amex and a Citi Amex are all co-branded cards that count as major bank cards.


That's right.  That's because HSBC, BofA and Citi are all major banks.  A co-branded Macy's Visa (or a Wal-Mart Discover) does not qualify as a major bank card.


You seem awfully sure. You cite Sears in your original post. Sears MC is issued Citi and Sears Solution MC is issued by HSBC - still ruling them out?

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beamMEup
Posts: 4,470
Registered: ‎12-31-2008
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Re: I need a store card...

You cite Sears in your original post.


I haven't cited Sears.  Sears MC and Sears Solution MC are in the same category as Macy's Visa and the others.  They're not going to count as a major bank card.  Even though they may be perfectly lovely in every way. 

Just puttin' syrup on something, don't make it pancakes.

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