Why do many say store cards are bad?

[Anonymous]

I made the mistake of the SCT, and ended up with way to many Comenity cards. It has come back to hurt me now, with to many inquiries and new accounts. That being said store cards have there place if you use them properly. For example, got my one car inspected today. It needed rear rotors and brake pads. It also needed a cabin air filter and was due for an oil change. Total bill was $653. Now I could have put that on a major credit card and got cash back, airline miles, or credit toward free rooms. Instead I used my Goodyear card, 6 month interest free on charges of $299 or more. I'll pay $53 when it posts then at least $100 a month or more. I'm using Citi's money for free. Would I want to carry a balance on this card, no way as it is at least 27% or more interest. But now I have 6 months to pay it off with no interest. To me that's worth it. To others, it wouldn't be. The danger and dislike many have toward store cards are SCT abuse, then carrying a balance at highest interest. When rebuilding (or building the first time) store cards help, Don't go crazy getting cards, only get ones you will use now and the foreseeable future. Amazon Prime is a great example, it's better on average that the Chase Amazon Visa, if you shop Amazon a lot. Same with Walmart, Lowes, Home Depot, or any single use card if you shop there frequently and don't carry a balance unless you're getting a 0% deal. 

[MrsCHX]

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@KSK1912 wrote:

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@MrsCHX wrote:
No, they didn't say they don't favor them. They said they're useless and a waste of a HP.

Just sayin'

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It's useless to "some" maybe, but not for all. It was several comenity accounts that helped me start rebuild my credit last year june. Total of 13 accounts and only about $3K total limit. Now in less than a year they total about $15K and have a year of on time payment history on all acounts. I will start closing them end of this year, couple at a time. But at least they have been a good ladder to step on to climb higher. So i would not say they are bad, it just depends on the individual's circumstances.  

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You'll see that I was responding to someone who said they are useless...

[KSK1912]

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@MrsCHX wrote:

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@KSK1912 wrote:

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@MrsCHX wrote:
No, they didn't say they don't favor them. They said they're useless and a waste of a HP.

Just sayin'

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It's useless to "some" maybe, but not for all. It was several comenity accounts that helped me start rebuild my credit last year june. Total of 13 accounts and only about $3K total limit. Now in less than a year they total about $15K and have a year of on time payment history on all acounts. I will start closing them end of this year, couple at a time. But at least they have been a good ladder to step on to climb higher. So i would not say they are bad, it just depends on the individual's circumstances.  

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You'll see that I was responding to someone who said they are useless...

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I know, i did not mean mine to look like i was responding to you.. Sorry!

[Anonymous]

Thanks,  I will read up on the links you provided. 

I only have two store cards, Macys and Best Buy, well technically I have  Target debit but I don't think that counts since it comes out of my bank account.

[CreditDunce]

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@Anonymous wrote:

Thanks,  I will read up on the links you provided. 

I only have two store cards, Macys and Best Buy, well technically I have  Target debit but I don't think that counts since it comes out of my bank account.

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Yes, Target Debit and prepaid REDcard cards do not count.  Debit and prepaid cards are not on your credit report.

Moreover, the Target store card is not coded as a store card, either.  On your credit report, it is coded as a normal bank credit card. Retail cards are normally coded as charge cards.   I am not 100% sure, but LN probably doesn't count it as a store card.  Of course, FICO doesn't care.  Store cards and regular credit cards are counted the same for all modern FICO scores.

To be clear, I don't consider store cards something to avoid simply because they may hurt my insurance risk score.   I weigh it in my decision, but I will get store cards if the rewards out weigh the gain.  The main reason I favor bank cards is the sign up bonuses are greater.  Sign up bonuses are my most lucrative options.  My credit card portfolio covers most of my main spending categories.